If you are researching the loan options at your disposal when financing a car, then you have most likely stumbled across credit union auto loans. Credit unions offer several advantages compared to borrowing from a bank, auto dealership or other loan organizations, however with every advantage comes a cost that you should be aware of. Below are some basic facts to assist you in weighing the pros and cons of credit union car loans.
The one major advantages of credit unions if that they typically offer superior car loan rates. The major reason for this is that credit unions differ from a traditional bank in that they are owned by the members themselves, and the goal of the organization is to pass savings onto their members opposed to increasing the profit of the share owners like a bank would. When you put your money into a credit union you are essentially buying a small amount of stake in the company. Something to be aware of however, is that credit unions only do business with their members. So if you are happy with the service of your bank, you may not want to switch your accounts just for the sake of doing your car finance.
A lot of people prefer credit unions because of the customer service they receive. Most credit unions operate out of one branch and since they’re memberships are typically smaller than large banks customers gain a familiarity with the people they do their banking with. When you go into a credit union to speak with a representative about a loan you can be sure that they are well informed and you can also expect to be treated less like a number like you may be at a larger company. The downside to this is that you will be limited to going to your credit union’s lone location, and many people may prefer the convenience of a larger bank with several branches to choose from or an online lending agency where they can be conditionally approved from the comfort of their own home.
Credit unions will often times allow the borrower to choose the duration that they have to pay their loan off. This give the borrower a lot of flexibility, and the option to pay less interest by paying off the debt quickly. This is a huge advantage if you have an above average credit score, but if you are like a lot of people than your credit score may not be where you want it to be. If this is you, than you may find solace from a bank, auto dealership or other loan agency.
Credit unions are a viable option when financing a car. Depending on your circumstances, a credit union may be the best way to go. Use this article to help determine if a credit union is right for you.