How To Choose Credit Union Car Loans

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Even with poor credit.

January 27, 2012

With your many loan options to choose from, selecting a credit union car loan says a lot about your desire to borrow from a local non-profit. Credit union car loans are advantageous because, as credit unions are non-for-profit organizations, they pass their earnings on to their customers in the form of better rates for saving and lower rates for borrowing. In terms of car loan rates, should you qualify for a loan, you will be getting car finance from a company who has thoroughly weighed the risk presented and trusts you to pay it back.

When deciding which credit union to borrow from, there are some factors you should include in your evaluation:

Step 1: Choose a credit union

You must become a member of a credit union in order to borrow, but this is really a good thing. Credit unions typically have lower interest rates for loans when you qualify and higher rates for savings. They are more focused on customer service and provide a local alternative to large institutional banks.

Step 2: Decide your budget

You should plan your budget carefully before applying for any loans. It's better to know what you can afford up front than to get your hopes up for an expensive purchase only to be turned down for the loan. Figure out what you can spend, and then spend some time deciding what you need your new car to do for you. You'll then be able to balance your needs and ability.

Step 3: Fill out the loan application

After you are a member and know your budget, it's time to apply for the loan. Credit unions will thoroughly check your background, including credit, employment and other financial history. It may take some time, but know that when it's approved, you will get a great rate with favorable terms.

Going with a credit union car loan may prove to be a great option for you. Shop around and find out if their rates fit your situation.

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