Finding a reasonable car loan rate can sometimes seem like an impossible task; however, it doesn’t have to be, especially if you join a credit union. Credit unions may not be the most popular choices to secure your auto loan, but they are definitely one of the better options out there.
What’s a Credit Union?
A credit union is a financial institution that was formed by a group of people who have a common bond. For instance, they may work for a certain business or set of businesses, live in a specific community, or even belong to the same church. As a result of their bond, they decide to pool their assets together so that they can provide loans and additional financial services to one another.
Because they’re only working in this tight-knit group to accumulate assets, they are able to pay dividends to their members instead of shareholders. This helps them offer lower loan rates, as well as higher savings rates and fewer service fees.
How Can Joining a Credit Union Work for You?
When searching for a new car loan, it’s important to find an interest rate that will make your monthly car payments affordable. This is not always easy to do at your local bank, or with the finance company that the car dealership will want to offer you. However, if you join a local credit union, you can take advantage of lower interest rates and essentially secure a better monthly payment for your loan.
How Can I Join a Credit Union?
Joining a credit union is usually no different than opening a bank account. However, a representative of the credit union will have to ensure that you qualify for membership. If you don’t have certain affiliations – or don’t have a family member with those affiliations – you may not qualify. However, there are usually a few community credit unions that will allow you to join just because of where you live.
Don’t settle for the high interest rate on your new car loan if you don’t have to. Instead, call around to different credit unions to see if you might get a better deal on the car you want to buy.