Many people, especially in this day-and-age, like to take out an auto loan when they’re buying a new or used car to soften the initial financial blow and space their payments out over time. However, with such a wide array of different auto loans (and financial institutions, for that matter), it can be a bit overwhelming to select the best auto loan for your situation.
During the decision-making process, several people turn to credit unions to finance their new ride as opposed to a traditional bank.
Here are the top three reasons why.
Lock in a Lower Interest Rate
Unlike traditional banks, credit unions are not for profit, so they’re able to offer lower rates across the board. For example, in the third quarter of 2021, the average rate on a five-year new car loan from a credit union was 2.83 percent, according to the National Credit Union Administration (NCUA). At traditional banks, it was 4.73 percent. At this rate, if you’re borrowing $30,000 for a car, the credit union saves you $1,538 in interest over the life of the loan.
At RMLEFCU, we pride ourselves on offering our members low rates for whatever we can, especially for auto loans! In fact, our infamous 90 Day No Pay special is still available for our members—with this special, you can enjoy 90 whole days with no payments when you buy a new or used car (or refinance your loan from another institution). Plus, you’ll be able to enjoy a rate as low as 3.00% APR*.
Greater Chance of Loan Acceptance
There’s no other way to say it–being a member of a credit union increases your odds of getting approval for a car loan in the first place! Unlike banks, which have strict requirements for approval, credit unions approach the matter a bit differently. Credit unions are owned by their members and thus, are very community focused. They tend to be more understanding than traditional banks and can afford to be more flexible when it comes to lending to their members. Even if your credit score needs some serious work, you’ll likely have better approval odds at a credit union (our Second Chance auto loan is perfect for those who are working on rebuilding their credit score).
Lower Loan Minimums
Since credit unions, like RMLEFCU, are laser-focused on keeping their members happy, they typically offer lower loan minimums than traditional banks do. Plus, generally, credit unions have a bit more flexibility than banks to work with you on loan amounts. Think of it this way–traditional banks work for profits, so they tend to prefer people who take out larger loans for an extended time so the banks themselves can make more money.
Choose RMLEFCU for Your Colorado Auto Loan
Buying a car is already a big enough financial investment as it is; save your time, energy, and money by choosing a credit union to finance your auto loan instead of a traditional bank. When you choose RMLEFCU for your auto loan needs, you can not only enjoy lower interest rates, a higher chance of loan acceptance, and lower loan minimums, but you can also enjoy personalized service from start to finish. Our biggest goal is to take care of our members and help them achieve financial success. Whether you have a lower credit score but still need a new car or are simply looking for the best deal on an auto loan out there, rest assured that all of us here at RMLEFCU would be more than happy to help you.