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Why you should get your car loan at a credit union Advertiser Disclosure Advertiser Disclosure We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by offering you interactive tools and financial calculators as well as publishing impartial and original content, by enabling you to conduct your own research and compare data for free – so that you can make sound financial decisions. Bankrate has agreements with issuers such as, but not limited to American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money The deals that are advertised on this site are from companies that compensate us. This compensation may impact how and where products appear on the site, such as such things as the sequence in which they appear within the listing categories and other categories, unless prohibited by law. This applies to our mortgage, home equity and other home loan products. This compensation, however, does have no impact on the information we publish, or the reviews that you see on this site. We do not contain the vast array of companies or financial deals that might be available to you. Emma Turner/Shutterstock.com

5 min read Published March 02, 2023

The article was written by Meaghan Hunt Written by Personal finance contributor Meaghan Hunt works as a writer, researcher, and editor across disciplines who is passionate about personal finance topics. After a decade of working in libraries for public libraries She now writes, edits, and conducts research as freelancer full-time. Edited by Rhys Subitch Edited by Auto loans editor Rhys has been writing and editing for Bankrate since the end of 2021. They are dedicated to helping their readers feel confident to manage their finances by providing precise, well-studied and well-researched data that breaks down otherwise complex issues into digestible chunks. The Bankrate promise

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At Bankrate we are committed to helping you make smarter financial decisions. We are committed to maintaining strict journalistic integrity ,

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In 1976, Bankrate was founded. Bankrate has a long track history of helping people make wise financial choices.

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We make sure that everything we publish will ensure that our content is reliable, honest and trustworthy. The loans reporter and editor focus on the things that consumers care about the most — different types of lending options as well as the most favorable rates, the most reliable lenders, ways to repay debt, and many more — so you’ll be able to feel secure when investing your money. Integrity of the editing

Bankrate has a strict policy and rigorous policy, so you can rest assured that we put your interests first. Our award-winning editors and reporters create honest and accurate content to aid you in making the best financial choices. Our main principles are that we appreciate your trust. Our goal is to provide our readers with reliable and honest information. We have editorial standards in place to ensure that this happens. Our editors and reporters thoroughly check the accuracy of editorial content to ensure the information you’re reading is correct. We keep a barrier between our advertisers and our editorial team. Our editorial team does not receive direct compensation by our advertising partners. Editorial Independence Bankrate’s editorial staff writes in the name of YOU as the reader. Our goal is to give you the best advice that will assist you in making smart personal finance decisions. We follow the strictest guidelines in order to make sure that content isn’t affected by advertisements. Our editorial team receives no directly from advertisers, and all of our content is verified to guarantee its accuracy. So when you read an article or a report it is safe to know that you’re getting reliable and reliable information. What we do to earn money

If you have questions about money. Bankrate has answers. Our experts have been helping you manage your finances for more than four decades. We are constantly striving to provide consumers with the expert advice and tools required to be successful throughout their financial journey. Bankrate adheres to strict standards policy, which means you can be confident that our content is honest and precise. Our award-winning editors and reporters create honest and accurate content that will help you make the right financial choices. The content we create by our editorial staff is factual, objective and uninfluenced from our advertising. We’re open about how we are able to bring quality content, competitive rates and useful tools to you , by describing how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated for placement of sponsored products and services, or when you click on certain hyperlinks on our site. Therefore, this compensation may affect the way, location and in what order products are listed in the event that they are not permitted by law. This is the case for our mortgage, home equity and other home loan products. Other factors, like our own proprietary website rules and whether or not a product is available within your region or within your self-selected credit score range may also influence how and where products appear on this site. Although we try to offer a wide range offers, Bankrate does not include details about each financial or credit item or service. If you’re considering buying a new or used car, a is a great choice for an loan. More than 4,800 federally insured credit unions in the United States, with over one hundred million members, according to the National Credit Union Administration (NCUA). Banks with national affiliations have more branches, and they are generally faster to adopt the latest technologies. But, people who are keen on saving money owe it to themselves to investigate what credit unions have to provide. Credit unions frequently have greater advantages than online lenders and banks They also provide personalized service and a variety of other advantages. The most important thing to remember is

Credit unions offer more borrower perks than some banks are in a position to rival. Lower interest costs, a community presence and a borrower-oriented business model make credit unions stand out.

6 reasons to get credit union auto loan If you’re looking for your next car, take into consideration these benefits of getting an auto loan from an institution like a credit union. 1. Low interest rates, unlike most financial institutions, credit unions are able to offer lower rates because they aren’t a profit-making institution. They’re also witnessing an exponential increase in car loan originations. “Typically, the rate of lending (at the credit unions) is extremely competitive when compared to other lenders in most situations,” says Bill Meyer who was the former director of public relations and content manager for CU Direct, which connects credit unions to dealers of all kinds across the country. In the last quarter of 2022, the interest rate on a five-year new automobile loan from a credit union was 4.74 percent according to the NCUA. In banks they were 5.53 percent. When you borrow $30,000 to purchase a car The credit union will save you $327 on interest throughout the term of your loan. 2. Personalized service, community ties The procedure for getting an auto loan isn’t too different from bank and credit union. But if you have a lower credit score, you may still be able to qualify for an auto loan through the credit union rather than banks. “Credit unions will likely offer more flexibility in the underwriting process,” says Mike Schenk Vice President of Research and policy analysis for the Credit Union National Association (CUNA) an association for trade. The credit union is also likely to work with you if you hit an upswing and require more time to make a payment. “You have a distinct story and it’s much more likely to be heard at an institution like a credit union. At big financial institutions they are more likely to encounter underwriting that’s established in stone and executed in some corporate office a couple of states away. If you visit an institution like a credit union, and you’re more likely be in discussion.” 3. User-friendly loan process Long gone are the days of having visiting a branch to get a car loan. The majority of credit unions let applicants apply online, over the phone or . If you are applying for financing at a dealer, “invariably, the dealer will direct you to credit union financing and the credit union that you can become a member of,” Schenk says, “so it’s a simple procedure.” Still, you should before visiting the dealership. There are a few dealerships that work with credit unions, and if you are able to become a member it is likely that you will get the best deal when dealing directly with your credit union. In addition, you’ll receive a favorable loan offer before you begin car shopping — and you won’t need to pay for dealer markup on the rate you are offered. 4. Credit unions also have other advantages. Members, and not shareholders, are the owners of credit unions. Any profits they earn go to the members in dividends. Credit unions can also give back earnings to their members through higher rates on deposit accounts and on loan products, such as auto loans. A majority of credit unions are also part in a joint branch and ATM network. Schenk claims that CUNA’s members use a shared ATM network with more than 40,000 ATMs. Credit unions focus on educating their members and educating them on how they are able to get help on the best financial choices for your particular situation. “Credit unions offer full-service offering the same financial products as banks. They’re structured differently and that results in significant benefits for credit union members,” Schenk says. The focus on members could mean a more nuanced dialog regarding your financial situation prior to when the credit union decides whether or not to approve or refuses your loan. Credit unions are often more understanding and lenient than traditional banks when it comes to making lending decisions. 5. It’s easy to join. Many believe that credit unions are available only to people who work for a certain company, industry or government agency, and that those who are not member of a group cannot join. Meyer says this is no longer the case. “Most credit unions will allow any person to sign up.” CUNA has credit unions that have community charters, which enable them to service greater geographic regions. If you seek the nearest credit union, visit and type in your ZIP code. “It is a shock to meet a customer who didn’t have access to a credit union,” Schenk says. 6. Car loans make up a large portion of what credit unions do Don’t be surprised to hear that an auto dealer will refer the customer to a credit union prior to a bank. Credit unions for new and used cars alike grew year-over-year to 17.9 percent and 19 percent in each case, as per 2022 . Credit unions had $166.8 billion of loan balances for new vehicles at the end of the third quarter of 2022 and $305.3 billion in used vehicles. How do I apply for an auto credit from a credit union loan? Financing a car through the credit union is comparable as other loan providers, except the membership requirement. If you are a member, you can apply for a car loan on the internet, by phone or at branches, based of the institution. The majority of credit unions will look over the following to determine your eligibility to get an auto loan your personal information. The information about your income and employment. Your . The VIN number for your vehicle. (VIN) and mileage for the vehicle you want to purchase. Be prepared to provide proof of insurance to the credit union in the application procedure. And note that while you might be able to enroll and request an auto loan the next day, some credit unions require you to wait a month or two before you apply. What are the differences between a bank, dealer and credit union auto loan? The main distinction between a bank and the credit union car loan is the terms of financing. Some banks offer discounts in particular when you have a good relationship, a solid payment history and a . Credit unions as well as banks can offer incentives, such as autopay discounts if you’re an existing customer. However, since credit unions are not-for-profit organizations and run by members, you can usually receive better rates and lower charges compared with for-profit banks that are owned by shareholders. If you take out a auto loan it is because the loan originates from a third party financial institution. Dealers get paid to match you up with the financing partner of one. This means that there are more options than the interest rate you pay through the dealership versus a bank or credit union. If there’s an issue with the financing company, the dealer won’t help you — you will need to solve the problem by yourself. If you are looking to purchase an used or new car there are a variety of choices to select from when it comes to financing. If you’re a member of the credit union you might have access to low interest rates and lower costs compared to big banks as well as dealership loans. The application process is identical when you join and the benefits could help you get approved even when your credit score isn’t the highest credit score.

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Written by Personal finance contributor Meaghan Hunt is a research as well as a writer and editor across various disciplines who has a passion for personal finance issues. After 10 years of work in libraries that were open to the public She currently edits, writes and conducts research as freelancer for full-time. Edited by Rhys Subitch Editored by Auto loans Editor Rhys has been editing and writing for Bankrate from late 2021. They are passionate about helping readers gain the confidence to take control of their finances with precise, well-studied information that break down complex topics into digestible chunks.

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