Are you considering buying a car? You’ve probably started researching interest rates on auto loans from banks and dealerships, but there’s another option that you might not know about – credit unions to finance your purchase.
Instead of charging members fees for using their services, a credit union gives back to its members by offering them higher savings and investment return rates and lower interest rates on loans.
Having a car loan from a credit union could possibly yield lower interest rates, lower minimum loan conditions, and better lending approval chances.
What Makes Credit Union Auto Financing Different?
There are several benefits to using a credit union when it comes to financing your vehicle, as opposed to a dealership or bank.
You could have a better chance of getting a loan accepted. Since credit unions are smaller and concentrated on their communities, they appear to have a greater understanding of members who have less than perfect credit scores. If you have a limited credit history, that can make a credit union a much better option than a bank.
Credit unions commonly offer lower interest rates than banks or car dealerships. Since credit unions don’t rely on income the way banks do, they don’t have to make as much money on your loan. But don’t worry, the method of getting a loan remains very similar. At credit unions, the loan application process typically consists of checking your name, salary, work details, and credit history. You may even receive a decision quickly with the local decision-making after your application is complete.
When Should You Finance a Car Through a Credit Union?
If you are just starting to build credit or have a thin credit file, a credit union may be more likely than a bank or auto dealer to approve you for an auto loan.
If you are already a credit union member, it makes sense to see how their loan conditions compare with those of banks or dealerships. Before you visit the dealership, you can get pre-approved auto loans from your credit union to give you more negotiating power.
Obtaining a car loan through a credit union can come with a range of benefits depending on the practices of the individual credit union such as car buying options through Credit Union Direct Connect and AutoTrek. As a member, you may find lower interest rates and lower loan minimums.
To see if a credit union is right for you, research credit unions in your area, compare offers from different lenders and choose the one that suits your budget and financial situation. If you have any questions regarding RMLEFCU’s auto loans give us a call at 303-458-6660 or email firstname.lastname@example.org. Let’s get you in a new car!