When it comes time to obtain your next auto loan, you might be wondering where you can go to get the best possible rates and the best deal. Who comes out ahead in the auto loan bank vs. credit union debate?
Offerings for auto loans from banks vs. credit unions can vary widely, but typically credit unions are able to offer more favorable terms and better service. Keep reading to learn why credit unions may be the best for auto loans.
Everyone wants to get the best deal on their auto loan. Buying a car is hard enough; having the right lender on your side can make all the difference.
Luckily, there are some areas to watch when comparing an auto loan from a bank vs. credit union.
Auto loan interest rates are the cost you pay to borrow money. It is expressed as a percentage and does not include any related loan fees.
While no bank or credit union can promise lower rates all of the time, credit unions typically are going to give consumers access to better rates than their larger counterparts. Credit unions are usually smaller and locally run, allowing them to cut operational costs and pass the savings on to their customers.
Having a lower interest rate on an auto loan can make a huge difference in the amount you pay over the lifetime of the loan, so this factor is very important.
It seems as if there’s a fee for everything. While that may be true, that doesn’t mean the fees should be astronomical. Any fees associated with auto loans should be manageable. Credit unions are typically going to have lower fees than the big-name banks do.
Credit unions frequently run specials or discounts for eligible members, so these perks should not be overlooked. In some cases, you may even be able to work out a deal where some of your fees can be reduced or waived. Since fees for auto loans can quickly add up, lower fees can make a big difference on the hit to your wallet.
Loan terms could include anything from the loan repayment period to the loan amount. Since they are smaller and can operate under their own standards, credit unions typically offer more flexible terms to borrowers and are more willing to work with you than larger banks.
One of the best things about credit unions is being able to shop around, and with a little bit of research, you should be able to find a loan product that works for you.
When applying for a loan, a top concern is whether or not you will be approved. Fortunately, credit unions can approve loans for many people who may otherwise struggle to obtain financing elsewhere. For example, if you are a student with poor or no credit who needs a cosigner, you will probably have the best luck at a credit union.
Whether you need a loan for poor credit, or a loan with a smaller loan amount than lenders typically give out, you should be able to find what you are looking for at your local credit union.
The importance of pleasant and helpful service throughout the loan process cannot be overstated. From working with you to get the best possible deal upfront to understanding if you need to make a late payment, customer service does more than just bring a smile to your face – it can affect the entire experience you have with your loan or other financial product.
Since credit unions are typically smaller, local, and community-run, members can expect to receive the best possible service and experience at all times. You won’t feel like just a number when you walk into your local credit union. You’ll feel like a valued member.
It’s easy to see why obtaining an auto loan from your local credit union just makes sense!
Credit unions work for you. As a member, you are considered part-owner with an opportunity to vote on how your credit union operates. And, because they are non-profit, credit unions are better equipped to take educated risks on community members, evaluate your finances with a more holistic view, and be willing to offer you a deal.
Membership is typically based on a specialized requirement such as your job, veteran status, location, or membership in other organizations or educational institutions. To determine whether or not a credit union is right for you, look into the most popular credit unions in your area that you may be eligible for, and compare offers from different financial institutions.
Partners Financial Federal Credit Union is here to work with you on the best possible terms for your loan. We are proud to offer lower thresholds for loan amounts and vehicle model years than most other credit unions. We can even do auto loans for amounts less than $5,000!
Give us a call today to discuss your next auto loan.