Best Credit Unions for Car Loans

Credit Union
•••

Getty Images/

sshepard

Did you know that nearly 20 percent of the auto loans in the United States are given by credit unions?

These days, it makes great financial sense to consider a credit union when you are shopping around for an auto loan. Whether you are looking to refinance or looking for a loan for a new or used vehicle, credit unions can be a great place to look.

Most people only compare the rate they receive from their bank to the rate they receive from their auto dealer if they do any comparison at all. But not considering all of the options is a great way to lose out on a tremendous amount of savings that you otherwise could benefit from immensely.

 Credit unions serve as a hyper-local financial institution that is designed to serve its members. To consider a car loan from a credit union, you will need to belong to a credit union in the first place. Most credit unions are centered around a preexisting community, such as a college or university, a professional organization, or your employer.

Pros of Getting a Car Loan Through a Credit Union

  • Customer service. The reason people choose to put their money in a credit union in the first place is that unlike banks, a credit union gives you more personalized attention. Because they are so customer-centric, you will likely have better interactions with a credit union than you’ll have with a bank.
  • Lower fees and rates. Unlike banks, credit unions are not-for-profit organizations, and thus, they have an incentive to help their members rather than to make money. This means that you might have an easier time getting good loan terms and a lower interest rate over the life of your loan.

    Pros of Getting a Car Loan Through a Bank

    • More experience. Most national banks have hundreds of locations around the country and have dealt with each aspect of the car loan application and service. Because there have been more people who have gone before you, you might have an easier time getting common questions answered or issues solved.
    • Better access. More locations and better national infrastructure mean more people available to answer your questions any time of day or night.
    • Better technology. Want to calculate exactly how a certain financial decision will impact your rates? How about getting a problem solved in the middle of the night? With a bank, it’s more likely that there will be technological solutions in place to solve your issues.

      Best Credit Unions For Car Loans

      Just like any other loan, the actual rate you will get will depend on your credit score, ideal loan amount, down payment, and the length of the loan. Here are some great options if you have figured all of that out already:

      Alliant Federal Credit Union

      APR: 3.49 percent

      Loan Details: Loans are available for up to 84 months, way longer than some others on this list, and there are no prepayment penalties. You can get pre-approved for the loan before you buy so that you can shop with confidence. You can become eligible for this credit union through your employer or select professional organizations.

      Consumers Credit Union

      APR: 2.44 percent

      Loan Details: You can secure a loan for up to 84 months, which is much longer than some of the more exclusive credit unions below. Unlike others on this list, Consumers Credit Union is fairly easy to join. It is an Illinois-based company, but they work with individuals all around the country, particularly those who don’t have great credit, are trying to rebuild credit and those who are looking to refinance.

      NIH Federal Credit Union

      APR: 1.49 percent

      Loan Details: Loans are available for up to 48 months, up to 125 percent of the vehicle’s value. This credit union is a bit exclusive, as it is only open to those in the healthcare or healthcare-adjacent industries who live in Maryland, North Carolina, Virginia, Washington DC, and West Virginia.

      Pentagon Federal Credit Union

      APR: 1.49 percent

      Loan Details: Loans are available for 36-84 months, up to 100 percent of the vehicle’s cost, and start at $500 and go all the way up to $100,000. This credit union is open to members of the military, U.S. government employees, or their supporting organizations. They offer unique options such as a payment saver loan where you pay lower payments and a higher interest rate, then at the end of the loan, you are responsible for paying off the balance either out of pocket, with a refinance, or trading in the vehicle.