Financing is a significant concern before you buy a car in the United States. Banks seem like the first choice, given their popularity and safety. However, they can cost you a significant extra amount of money over credit unions, which are nonprofit cooperative organizations. Credit unions can be the best option among the many auto loan lenders for increased savings and lower rates. This article discusses five reasons trusted credit unions make a perfect choice for a car loan.
Easy Process
The majority of trusted credit unions provide online banking services. If you’re 18 or older, you can easily open an account online with a government-issued Identity document. Once you have opened an account with a trusted credit union, a financial advisor is assigned who can help you learn what you need to know about using a credit union for a car loan.
Higher Chances Of Loan Approval
Commercial banks have many applications to process and have stringent requirements for a good credit score. However, with credit unions, you have a greater chance of loan approval even with a lower poor credit score. Additionally, credit unions do not have a minimum balance requirement and offer you a loan at lower interest rates. These unions are not in the business of just making profits and paying attention to the needs of their customers to get them loans easily and quickly.
Key Takeaway: Credit unions are a favorable option over banks, especially if you do not want to face any credit issues or have a poor credit score.
Financial Education
Credit Unions work with one principle- people helping people. Community members are provided with many resources to help them gain financial literacy—for example- special education and resource centers. Let’s say you are buying a car for the first time and don’t know enough about the process. Your credit union will ensure that you are thoroughly explained about the loan application process. The financial advisors at credit unions are well aware of the dealers’ tricks and help you calculate the correct value of your car. Overall, they don’t just provide loans but also help you with money management and better decision-making.
Personal Attention
Credit Unions always put their members first, and their strategies are customized to meet your needs. Credit unions run democratically and have a transparent process. An open forum exists where members can submit any suggestions or grievances regarding their car loan process. Other community members can provide you with solutions and assist you in finding the best loan option. Credit unions have a customer-centric approach and give personal attention to your queries throughout the process.
Not Profit-Oriented
Credit unions are nonprofit cooperatives that are run by members of a specific community. Unlike banks, they do not have any investors or shareholders and are thus not obligated to earn higher profits. Once you join a credit union, you are no longer just a customer but a member with a voice in the union’s administration. Ultimately, all member profits are returned through more favorable credit terms and lower interest rates on savings accounts. This is very important for first-time car buyers. That means you can expect better savings with car loans.
How Can You Apply For A Car Loan From A Credit Union?
Financing a car through a credit union is an easy process and you have to provide the following details:
- Your personal information.
- Information about your source of income.
- Your credit history.
- The vehicle identification number (VIN).
Final Words
Commercial banks are big organizations and are ultimately driven by profit. Credit Unions are smaller companies and provide you with personal attention to your car loan process without having to take any pressure. Ultimately, both will give you a loan, but credit unions will ensure better financial savings. Happy Car Shopping!
