Skip to main content
Helpful Articles

How Do Auto Loans Work from Credit Unions?

There are several key advantages to obtaining an auto loan from a credit union before you head to your local car dealership. Compared to purchasing from a large bank, national lender, or dealership, you will find the auto loan process at a credit union is more personal, more focused on your unique needs, and in most cases, more convenient and affordable.

If you are thinking about buying a car, check your local credit union first. Many people find this to be the best money-saving opportunity, and with less frustration. Read below for more information to help you compare the differences.

What Is the Difference?
For those who aren’t accustomed to getting an auto loan through a credit union, they are often surprised how much of a savings is possible - both with time and money. Why? The service and the overall flexibility offered, honest upfront rates, and a variety of loan options. But, there are other differences we will discuss below. 

Members Are Not the Same as Customers
One of the lesser known reasons to be a part of a credit union is that you are not just a customer. Rather, you become a member of the credit union. While banks must make profits for their shareholders, credit unions exist only to serve their members (who are the shareholders), so credit unions keep the member’s best interest in mind. Because of this unique structure, credit unions exist solely to serve its members and to provide a safe, convenient place to save and borrow money at competitive and reasonable rates.

Personalized Attention
Credit unions may be able to help you with more complex situations or hard-to-lend scenarios. For example, if you were to apply for an auto loan from a traditional bank, you would have to meet their credit requirements, employment requirements, and income rules.

At a credit union, there are still financial requirements. However, at your local credit union you also get personalized, one-on-one attention to meet your goals. In most cases you can talk to your credit union lender online, over the phone, via email or in a local branch.  So they can work with you to review your options and help secure the auto loan that is best for your needs and budget.

Credit Qualifications
Every loan has credit qualifications. Although, loans you obtain from a credit union may have less stringent requirements. Good credit is the best way to get a low-interest loan. Credit unions gather information from your credit report about how well you pay your bills as well your history of credit use.

Income Requirements
If you are already with a credit union, they likely already know about your income history. Most credit unions require you to have a steady form of employment to secure a loan.

Benefits of Credit Union Auto Loans
Aside from the details above, there are other advantages to obtaining an auto loan from a credit union before heading to the dealership. Securing your financing before walking into the dealership puts you in charge. You know exactly how much you plan to spend which puts you in a better position to bargain, or walk away if you aren’t getting the right deal for you.

Interest Rates
Often credit unions offer better interest rates. With borrowing, you should compare your options. However, you will often find credit union interest rates lower than rates you can get at the dealership or online through specialized lenders. Many large lenders provide auto dealerships with incentives to write loans, with lenders often providing commission to the dealership. This commission is paid through higher auto loan rates - all hidden costs passed along to you.  

While this practice is common when securing financing through a dealership or large lender, it isn’t something you will find at your local credit union.

What Makes Credit Union Auto Loans Different from Traditional Banks?
A credit union is a place to go when you want personal service and one-on-one attention. You can count on someone who lives and works in your community to be there, listening to your needs and goals and helping you make decisions that are right for you. Credit unions are willing to work with you to get the best loan in your hands, but they are not driven by the biggest profit margins. The money you invest, or borrow, from a credit union is protected just as it would be with any accredited financial institution so there isn’t any risk to working with a credit union vs. another financial institution or lender.

Getting The Best Credit Union Auto Loan
If you are thinking about buying a car, truck, boat or other vehicle, make your first step a visit to your credit union. Even if you are not a member of one just yet, you can join, learn about credit offers, and secure a loan quickly. Work with the credit union’s lending team to determine how much of a vehicle you can afford to buy. It doesn’t take long to discuss your needs and complete the loan process so you can shop for the best option for you.

The credit union will help you purchase the vehicle from the dealership. And, within a matter of hours, you could be driving home with your new car. It really can be that easy. Most importantly, credit unions are committed to working with you. It can be very valuable for you to learn more about auto loans from credit unions no matter what type of vehicle you plan to buy.

If you are in the Cleveland area and looking for you next auto loan, contact Best Reward to find out how we can help you.

Learn More  Shop Now  Apply Now