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Using a Credit Union to Get a Car Loan

The fact that only one in five car loans are made from credit unions at the moment is something of a shame, as getting an car loan through such an institution is an idea well worth exploring because they can offer competitive financing rates to their members versus other institutions.

One of the problems is that many people do not understand what a credit union is or know that they even exist at all. Credit unions are financial institutions formed by a group of people with a common bond (like a church, business or union). Credit union members pool their assets to provide loans and other financial services to each other.

Who can join a credit union? The simple answer is wherever you live and whatever your occupation chances are that there is a credit union in your area that you will be eligible to join. Some are affiliated with professional groups, others are part of companies, and some credit unions simply have certain geographical requirements for membership.

Why a credit union for car loans?  Typically, credit unions are smaller organizations, which means you’re going to get faster service as approval decisions are made on a local level, no waiting for faraway bureaucrats to get around to reviewing your application for an auto loan. You should receive your funds faster as well as a check can be cut right at that the local branch. Processing fees are usually cheaper as well.

Once you have your loan paying it off is often easier through a credit union as well. Terms are usually better with lower interest rates. That means your loan is going to be shorter and you will avoid overpaying for the car you buy.

A credit union car loan may not be for everyone, but if you are in the market for a car loan it is an option well worth considering.

Don’t End up with the Wrong Car Loan for You

Getting an auto loan can be a tricky business. Getting a good auto loan can be even trickier. Although there are a number of things to consider, consider them you must otherwise you are going to get burned and end up with a bad auto loan deal. The following are auto loan that you can almost be assured will not help you get a great auto loan deal at all.

Failing to See Beyond the Monthly Payment – If you base your auto loan decision on the amount of your monthly payment alone you are asking for trouble. There are several ingredients to a loan, and all can be manipulated to make the monthly payment appear low.

Too Many Payments – If you opt to make more payments to keep the monthly payment at a lower level you will end up paying more in interest and you may also be making payments for so long the car will have fallen to pieces before it is ever paid off (especially true in the case of a used vehicle.) Secure an auto loan with monthly payments that suit your budget and take an auto loan for a lesser amount if you have to.

Ignore Your Credit – If you are lucky enough to have good credit then your auto loan options are wide open. OK credit will still get you an auto loan but expect to pay more for the privilege. There are such things as bad credit auto loans but you can be certain that you will be paying through the nose by quite a large margin. If you take care of your credit in the first place you will save yourself a lot of expensive headaches down the road.

Five Keys to Getting a Great Car Loan

Whether the car of your dreams is a brand new, shiny straight off the production line model or a classic used model you have had your eye on for a while chances are that you are going to need an auto loan to make your motoring dreams a reality.

There are many ins and outs to the car loan business and a lot of advice out there about the best way to go about securing yourself the best deal possible. However there are certain keys to getting a great auto loan that you should keep in mind when you are ready to go car shopping. Here are the top five:

Know Your Budget – Before you start applying for car loans sit down and take the time to work out how much you can realistically afford to pay each month. Once you have that figure down in black and white stick to it, do not allow yourself to be talked into a bigger loan you cannot afford.

Understand Your Own Credit Situation – It is also essential that you understand exactly what state your credit is in before you start shopping for car loans. All US consumers are entitled to one free credit report from each of the three credit reporting bureaus every year so take advantage of this and get yours now. Examine it carefully; many people’s credit reports contain false information that is damaging their credit score without them even realizing it.

Look at the Big Picture – Most borrowers choose a low down payment because it’s easy to manage today. However, that choice increases the total cost of your auto loan and usually leaves you ‘upside-down’ (meaning you owe more on the vehicle than it’s worth) for years to come. It is essential you consider details like this and look at the auto loan as a whole, not just what it is going to cost you for the first few months.

Shop Around – Examine all the options available to you; don’t just go with the first company who look like they might offer you a loan just because you are in a hurry. A vehicle is a major purchase and taking the extra time to make sure you are getting a good deal on your auto loan is worth it every time.

Read the Fine Print – Life changes, things happen and you need an auto loan that is as flexible as possible. Will the lender work with you if you unexpectedly lose your income for a few months? Will they hit you with a penalty if you find that you can actually afford to pay off your loan faster than you had imagined? Read through the terms of the auto loan very carefully before you sign a thing.