If you’re one of the 8.7 percent of Americans who don’t have cars but are thinking of buying one, know that it isn’t always easy. Taking out a loan from a bank to finance your vehicle may not pan out because of bad credit history or unfortunate timing.
Here is where credit unions come in. A credit union is a not-for-profit cooperative where members can get the same financial services offered by banks, but with a much lower interest rate. That’s why, with its 114.5 million members in the U.S., credit unions are becoming a popular car loan option for many. Here are three of the reasons.
1. Low Interest Rates
Interest rates in credit unions are almost two percent lower than bank rates. As of March 2017, the loan rate for a used car that will be paid in 36 months is 2.74 percent in credit unions. But, new or used car loans can reach up to 6.57 percent in banks in cities like Ogden in Utah.
2. Personalized Service
When you go to a bank, you’re treated as a customer. You’re just one of the hundreds of thousands. Credit unions are smaller and have a more tight-knit community. They more likely cater to your specific needs and work with you even if you have a low credit score, making you eligible for a car loan.
3. More Benefits
Being a member of a credit union has more benefits than just lower interest rates on car loans. When you’re a credit union member, you’re also an owner. It means you can enjoy taking out a mortgage, personal loan, and credit card at a lower cost than traditional lenders, but with higher savings.
Owning a car doesn’t have to be so stressful. With credit unions that cater to your specific needs, you can easily hop into your dream car without breaking a sweat.