In the world of car finance you have your choice between many different types of lenders, but after you do your research you will find a credit union car loan advantageous for many reasons. Loan options abound when you are in the market for the best car loan rates, from online to dealerships. Going with a credit union says as much about your faith in a local organization as it does about your desire to get the best rate possible. Learning the advantages of credit union car loans will help you make an informed decision when choosing a car loan lender.
Better Interest Rates
The primary reason to join a credit union and apply there for a loan is the favorable interest rate. Because they are non-profit organizations, they give their earnings back to members in the form of lower rates. When searching for car finance, this means a lower monthly payment and less interest over time. In addition to lower interest rates, credit unions charge lower fees.
Convenience and Customer Service
It’s easy to join a credit union, and once you do, applying for a loan is a matter of sitting down with a finance agent, going over your financial information, and waiting for the final approval. It might not be as fast as an online lending agent, but you get to talk to a real person and can count on the highest customer service while you do. You are a member at a credit union, and not one of many to be serviced at a large bank. Plus, if you are a member and have a pending application, you can also do all of your ordinary banking at the same location. You will receive a straightforward response from the credit union along with the reasoning behind their decision. The rate and terms they offer for the auto loan will be competitive and without hidden fees.
Shorter Loans
Credit unions will also give you the choice of how long you want the loan to last. The longer payback period for the loan, the more interest you pay. If you have the option to choose a shorter period of repayment, the monthly payment could be higher, but you will ultimately pay less interest. It is, therefore, in your best interest to pay back the loan as quickly as you can afford.
Not-for-profit
The fact that credit unions are non-profit makes all the difference in the world. Their only incentive is to return their earnings back to their members in the form of better interest rates, whether for lending or for saving. By removing the profit element from their business, they avoid creating the impression that they take advantage of their customers through outrageous loan practices.
There are several advantages to borrowing from a credit union, some of which are more intangible, but nevertheless valid and important. Don’t expect to get the fastest approval or be able to get a bad credit loan. Do expect, however, to get the highest in customer service and the most competitive rates available.
