Why you should get your car loan at a credit union Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our aim is to assist you make smarter financial decisions by offering you interactive financial calculators and tools that provide objective and unique content, by enabling users to conduct research and compare information for free and help you make financial decisions with confidence. Bankrate has agreements with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Earn Money The products that appear on this website are provided by companies that pay us. This compensation may impact how and when products appear on this website, for example for instance, the order in which they appear in the listing categories in the event that they are not permitted by law. This applies to our mortgage or home equity products, as well as other products for home loans. This compensation, however, does have no impact on the information we publish, or the reviews you see on this site. We do not include the entire universe of businesses or financial offers that may be accessible to you. Emma Turner/Shutterstock.com

5 min read Published March 02, 2023.

The article was written by Meaghan Hunt. Edited by personal finance contributor Meaghan Hunt works as a researcher, writer and editor in a variety of disciplines who is passionate about personal finance issues. After 10 years of work in libraries for public libraries She now writes, edits, and conducts research as a full-time freelancer. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate from late 2021. They are dedicated to helping their readers to manage their finances with clear, well-researched information that breaks down complex subjects into bite-sized pieces. The Bankrate promise

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There are money-related questions. Bankrate has the answers. Our experts have helped you understand your money for over four years. We continually strive to give our customers the right advice and tools needed to make it through life’s financial journey. Bankrate follows a strict standard of conduct, which means that you can trust that our content is honest and reliable. Our award-winning editors and reporters create honest and accurate information to assist you in making the right financial decisions. The content we create by our editorial team is objective, factual and uninfluenced by our advertisers. We’re open regarding how we’re able to bring quality information, competitive rates and useful tools to our customers by explaining how we earn money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated for the promotion of sponsored goods and services or by you clicking on certain hyperlinks on our site. Therefore, this compensation may influence the manner, place and in what order items appear within listing categories and categories, unless it is prohibited by law. This is the case for our mortgage, home equity, and other home lending products. Other factors, like our own website rules and whether a product is available within your region or within your own personal credit score could also affect the manner in which products are featured on this website. While we strive to provide a wide range offers, Bankrate does not include details about each financial or credit item or service. If you’re looking to purchase a new or used car it’s a good option for the loan. The number of credit unions is more than 4,800 federally insured credit unions in the United States, with over 134 million members, according to the (NCUA). The national banks are more diverse and generally more quick to introduce innovative technologies. However, those who are interested in saving money owe it to themselves to explore the benefits that credit unions provide. Credit unions frequently have higher rates than online lenders or banks, and they also offer personalized service and a variety of other benefits. The most important thing to remember is

Credit unions are able to offer greater advantages to the borrower than other banks can rival. Lower interest rate, a community presence, and a business that is geared towards the borrower model set credit unions apart.

6 reasons to apply for credit union auto loan If you’re looking for your next car, take into consideration these six benefits of getting an auto loan from the credit union. 1. Low interest rates, unlike most banks, credit unions can provide lower rates since they’re not a profit-making institution. Therefore, they’re experiencing exponential growth in auto loan originations. “Typically, the rate of lending (at the credit unions) is competitive to other lenders in most circumstances,” says Bill Meyer who was the former director of public relations and content manager at CU Direct, which connects credit unions to auto dealers across the nation. In the final quarter of 2022, the interest rate on a five-year new automobile loan through a credit union was 4.74 percent as per the NCUA. In banks the rate was 5.53 percent. For example, if you’re borrowing $30,000. to finance automobile The credit union will save you $327 on interest over the course of the loan. 2. Personalized service, community ties The process for taking out an auto loan isn’t too different from the credit unions and banks. However, if you have a lower credit score however, you might still be eligible for an auto loan from the credit union rather than banks. “Credit unions are likely to offer more flexibility in the underwriting process,” says Mike Schenk who is vice president of research and policy analysis for the Credit Union National Association (CUNA), a trade association. The credit union is also likely to assist you if you hit the rough spots and require longer to complete payments. “You have a unique story and your story is much more likely to be heard at the credit union. In large financial institutions, you’re more likely to experience underwriting that is written in stone and carried out in some corporate office a couple of states away. Visit an institution like a credit union, and you’re more likely engage in a discussion.” 3. A user-friendly loan process Long gone are the days of needing to go to a branch in order to get a car loan. The majority of credit unions let you apply online, on the phone or . If you’re applying for financing through a dealership, “invariably, the dealer may refer you to credit union financing as well as an institution that you could join as a member,” Schenk says, “so it’s an easy process.” However it is recommended to do your research prior to visiting the dealership. There are a few dealerships that cooperate with credit unions and if you’re able to join a credit union, you will likely be able to get the best rate dealing directly with your credit union. Plus, you will already be offered a competitive loan offer when you start car shopping and won’t have to pay dealer markup on the rate you are offered. 4. Credit unions have many additional benefits. Members, not shareholders, have their own credit unions. Any profits they earn go to the members in the form of dividends. Credit unions also can give back the profits to their customers through higher rates on deposit accounts and on loan products, such as auto loans. The majority of credit unions participate in a shared branch as well as ATM network. Schenk says CUNA’s members have a shared ATM network with over 40,000 outlets. Credit unions are focused on educating their members, too, so you are able to get help on the best financial choices to suit your needs. “Credit unions offer full-service with the same products as banks. They’re just structured differently which results in substantial benefits for credit union members,” Schenk says. This focus on the member could result in a more precise discussion regarding your financial situation prior to when the credit union approves or denies your loan. Credit unions might be more understanding and accommodating than traditional banks when it comes to making lending decisions. 5. It’s easy to join. Some believe credit unions are open only to employees of the same industry, business or government agency, and that those who are not member of a group cannot join. Meyer claims that this is not the case anymore. “Most credit unions are now allowing any person to sign up.” CUNA has credit unions with community charters that allow them to serve greater geographic regions. If you seek an institution near you then go to the website and enter your ZIP number. “It would be shocking to meet a customer who was not able to access an institution of credit,” Schenk says. 6. Car loans are an integral part of what credit unions do Be prepared if an auto dealer refers customers to credit union before a bank. Credit union for new and used cars alike increased in 17.9 percentage and 19.9 percent and 19 percent, respectively, according to 2022 . Credit unions had $166.8 billion of loan balances for new vehicles at the end on the last quarter in 2022’s third quarter, and $305.3 billion of used vehicles. How do I apply for an auto loan? The process of financing a car with a credit union is similar as other loan providers, except for the membership step. If you are a member, you can apply for a car loan via the internet, over the phone , or at an office, depending upon the particular credit union. A majority of credit unions review the following to determine the eligibility requirements to get an auto loan: Your personal information. Your employment and income information. Your employment and income information . The number of your vehicle’s identification (VIN) and the miles for the vehicle you plan to purchase. You must provide proof of insurance to the credit union as part of the application process. Note that although you may be able to enroll and request an auto loan on the on the same day, certain credit unions will make you wait for a few months or even two before you apply. What are the differences between a bank, dealer and credit union auto loan? The primary difference between a bank and credit union auto loan is the terms for financing. Some banks offer discounts, especially when you have a good relationship, a good track record of payment and . Credit unions and banks might offer incentives such as autopay discounts if you’re a current customer. However, since credit unions are not-for profit organizations and run by members, you can usually enjoy better rates and less costs compared to banks that are for profit, which shareholders own. When you apply for a auto loan it is because the loan is provided by a third-party financial entity. Dealers get paid to match you with the financing partner of one. This means that there may be better alternatives to the rate that you receive from the dealership versus a bank or credit union. In addition, if there’s an issue with the finance company and the dealer isn’t able to assist the customer — you’ll be required to resolve the issue yourself. If you are looking to purchase a new or used car, you have several options to choose from for financing. If you’re a member of the credit union you might be able to enjoy lower rates of interest and charges compared to banks with large branches as well as dealership loans. The application process is similar after you’ve joined, and the benefits may aid in getting approved, especially if your credit score isn’t the highest credit score.

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Written by the Personal finance contributor Meaghan Hunt is a researcher and writer across disciplines with a passion for personal finance topics. After a decade of working in public libraries, she now writes, edits, and researches as a full-time freelancer. Written by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since late 2021. They are enthusiastic about helping readers gain the confidence to take control of their finances with concise, well-studied and well-researched content that breaks down otherwise complex subjects into bite-sized pieces.

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