How Sensible are Credit Union Auto Loans?
Most used car dealerships in Greer, SC, recommend that you walk in their car lot with a pre-approved auto loan. That opens up three typical options for you. Banks, credit unions, and private lenders. Although the first is the most popular path among many consumers while the last is often considered when the situation is dire, the middle option is actually the underestimated peer among all. Credit unions make a strong case when it comes to auto loans and do outrun other financing options both in terms of approval and interest rates. If you are a part of a credit union, consider it first before exploring other avenues.
How do credit unions work?
As you may already know, you are required to be a member of the credit union in order to draw out an auto loan from the institution. This can happen either by maintaining a savings account with it or buying some stake at the union. The money that resides in the pool is circulated as loans to members who need the same and the interest collected is sent back to the pool again.
Now, most credit unions are not-for-profit. That means they do not use the interest collected to inflate their cash flow. Instead, they use the extra amount to offer you a cheaper loan and charge much lower rates than banks and private lenders. The top used car lots in Greer, SC, are likely to have a communication link with your credit union or they will simply accept a check. When the process is similar to banks, why look anywhere else.
Banks vs credit unions
As of June 2020, the interest rates charged by banks on auto loans stood at an average of 4.33% for a term of 36 months. For the same plan, the top credit unions of the country charged their members somewhere around 1.14% to 3.75%. You do not need a calculator here to estimate which deal is better.
Plus, banks have a rigorous credit eligibility procedure that looks into a host of factors other than your credit score. Credit unions, however, are comprised of members from similar backgrounds who are more likely to consider your financial position with compassion than banks. As evident, the ease of approval is higher in credit unions.
Credit union auto loans are sensible
Be sure that you will save more money on your auto financing with credit unions than any other lender out there. But it may so happen that you do not have the seed money to become a member in the first place. Consider banks in such scenarios or pick car dealerships in Greer, SC, who can help you with your financing. Reputed car dealers, like Happy Auto, always try their best to get you a plan that will fit your budget.