How Do Auto Loans From Credit Unions Work?
If you're looking to buy a new car or truck, chances are you need to take out an auto loan. Though you can take out loans from banks or online lenders, an auto loan from a credit union is your best bet for getting the right terms for your needs. Plus, they work essentially the same way, so there won't be any surprises when it comes to borrowing or paying it back.
However, there are some credit union car loan requirements that you should be aware of. Specifically, to get an auto loan from a credit union, you typically have to become a Member.
Not sure if joining a credit union is right for you? Give the Credit Union of Southern California (CU SoCal) a call at 866.287.6225 today for an obligation-free consultation with our experts about our great banking products and how to become a Member. Anyone who lives, works, attends school, or religious services in Los Angeles, Orange, Riverside or San Bernardino counties can become a Member of CU SoCal.
Get Started on Your Auto Loan!
What Is A Credit Union?
If you've typically done all of your banking with a traditional bank, you might be wondering
what credit unions are and how they work. Credit unions are financial co-operatives owned by their Members. They are not-for-profit organizations, so any profits made by the credit union are passed along to Members in the form of low interest rates on loans, lower fees, and higher yields on savings accounts.
How Do Credit Unions Differ From Banks?
Credit unions are different from banks in that they are obligated to their Members, not shareholders. In other words, any profits made go towards helping Members thrive financially.
Banks, on the other hand, are almost always for-profit-institutions, and while they can offer competitive, low-interest rates, they almost always have higher fees than credit unions.
That said, the biggest difference between banks and credit unions is the fact that there are usually no restrictions on who can obtain services from a bank.
To learn more about how credit unions differ from banks, please reading our Blog post on
Credit unions vs banks.
How about safety? Are
Credit unions safer than banks? Bank are insured by the FDIC, or the Federal Deposit Insurance Corporation. On the other hand, credit unions are insured by the NCUA, or the
National Credit Union Administration.
Both agencies are government-regulated to protect the institutions and their Members, so you can expect the same financial safety from a credit union that you would a traditional bank.
Why Get an Auto Loan from A Credit Union
How do auto loans from credit unions work? They’re basically the same as an auto loan from a bank; however, credit unions do offer several important advantages, including:
Lower Interest Rates
Because credit unions are nonprofit organizations, Members can typically enjoy lower interest rates compared to banks.
In fact, depending on how much you borrow for your car, you could save thousands of dollars over the life of the loan compared to a loan from a bank.
Better Odds of Being Approved
Another reason to consider an auto loan from a credit union is that you have a higher chance of getting approved for the loan. Credit unions work hard for their Members, which means that even if you have less than ideal credit, there’s still a great chance that you’ll get approved.
Lower Loan Minimums
Credit unions tend to offer lower loan minimums to Members, which can be helpful if you only need to finance a portion of your car purchase or if your car isn't all that expensive to begin with.
Lower / No Fees
One of the best advantages of getting an auto loan from a credit union is the lower fees. Because profit isn't a driving factor for credit unions, they have no reason to charge expensive fees for loan applications or prepayment penalties.
Personalized Service
Credit unions are smaller organizations than traditional banks and tend to be more community-focused. This means you get more personalized service. As a Member,
you are the primary focus, and credit unions are more willing to offer customized loan agreements that will suit your needs and financial capacity.
Becoming a Member Isn't As Hard As You Might Think
Don't let the idea of becoming a credit union Member scare you off; the process is much easier than you might imagine. You don't have to be a government employee or work in a particular industry to join most credit unions.
Anyone who lives, works, attends school, or religious services in Los Angeles, Orange, Riverside or San Bernardino counties can become a Member of CU SoCal.
Credit Union Membership Requirements
Though joining is relatively simple and straightforward, you should be aware of some credit union Membership requirements before you apply. Typically, you have to have some kind of connection to a group, employer, or local community to join. You might already fulfill one or more of these conditions, making Membership even easier.
Employer
Many employers will sponsor a credit union Membership for their staff. This is often one of the benefits of some places of employment that are eager to help employees save money and be financially secure. Check with your employer to see if they grant access to any local credit unions.
Geographic Location
This is the simplest way to join a credit union. Instead of working with a specific company, many credit unions only require that Members live within a specific city or region. For instance, CU SoCal is open for Membership to anyone who lives, works, attends school, or religious services in Los Angeles, Orange, Riverside or San Bernardino counties.
Family
Some credit unions will allow the family of Members to join. This means that if your parent or another immediate relative is a Member of a credit union through their employer, you may also be able to join simply due to your relationship with them. It's a good idea to check with family Members to see if they are enrolled with a credit union before you take out an auto loan elsewhere.
Occupation
Sometimes you don't have to work with a specific employer to join a credit union as long as you work within a particular industry. Education, government, and health care are some of the top sectors associated with credit union Membership.
Join an Organization
There is a wide variety of organizations that sponsor Membership to local credit unions. The most common of these are labor unions, universities (both for students and employees), and even some churches.
CU SoCal Auto Loans
At CU SoCal, we know how important it is for Southern Californians to be on the move, so we make applying for an auto loan easy. Whether you want to finance a spacious family car for trips to the beach, a pickup truck for work, or a four-wheeler for weekend fun, we have you covered.
CU SoCal auto loans offer up to 120% financing with a fixed interest rate, and we never ask our Members to pay application fees.
Apply For A CU SoCal Auto Loan Today!
Still wondering how to apply for an auto loan with a credit union? The answer is easy – just click here to apply for Membership today.
If you’re not quite ready to apply, give our financial experts a call 866.287.6225 for a free consultation to see if an auto loan is right for you.
Get Started on Your Auto Loan!