How to Get a Credit Union Car Loan
If you’re in the market for a new or used car and won’t be able to pay the total amount outright, you’ll need to finance your car with an auto loan. When you think about getting a car loan, do you automatically think about financing through a bank or car dealership? It’s certainly an option, but there’s another choice out there that’s worth considering – getting a car loan through a credit union.
Getting a credit union car loan has a lot of benefits when compared with financing through a bank or dealership.
Let’s dive in and take a look at the advantages of getting a credit union car loan and how you can be considered for one:
Credit Union Car Loans May Have Lower Interest Rates
When you take out a car loan, you’re borrowing money from an institution, which you’ll pay back in monthly increments. The interest rate is determined by several factors, including your credit score. Your monthly payment is based on this interest rate and the principal balance. (Note: The term "interest rate" is not interchangeable with the term "APR," which is determined by the lender depending on lender fees and other costs.)
Interest rates fluctuate for a number of reasons and vary across lenders. But small percentage points make a huge difference in what you end up paying over time. For example, let’s say you need to take out an auto loan of $31,000 and you’ve agreed to pay the loan back over a 72-month period. If you have an APR of 4.5%, your monthly payments will be $492/month. With an APR of 2.3%, your monthly payments will be $461. That’s a difference of $2,232. For just a couple percentage points, you’ll be paying a lot more for your loan.
Credit unions usually have lower interest rates than banks and dealerships, which means financing your car through a credit union could potentially save you thousands of dollars.
Credit Union Car Loans Come With Benefits
When you finance a car through a credit union, you become a member of that credit union. Doing so means you get to take advantage of all the member benefits. Credit unions aren’t owned by shareholders, they’re owned by members, so profits made by the credit union go right back to the members.
In practical terms, that means being a member of a credit union gives you access to lower rates on all types of loans including mortgages and personal loans. Other benefits of being a member of a credit union include low to no fee checking and savings accounts; financial education resources and tools; and often, access to a wide ATM network. Overall, it’s estimated that credit union members receive a total of $10 billion worth of benefits each year!
Credit Union Car Loans May Be Easier to Get
Credit unions have far more flexibility when it comes to their car loan offerings than banks or dealerships. Many banks have strict standards for their auto loans, but because of the structure of credit unions, they are able to work more closely with your specific financial situation.
Credit unions also frequently throughout the year to support financial growth in the community. For example, promotions like Community First’s twice a year Car Sale and 90-Day No Payments Program offer special financing to everyone in the community.
How to Get a Credit Union Car Loan
The first step to getting a car loan through a credit union is to apply. When you apply for a car loan through Community First, we’ll consider your credit history, credit score, and current financial situation to determine your auto loan rate and loan terms. Financing through Community First will give you access to all our membership benefits.
