Faq About Credit Union Loans

Are you getting a car loan? Buying a car is an exciting event. Selecting your car loan may be the last thing on your mind. But whether you're opening a new checking account, savings account, or taking out a car loan, your choice of banking institution will affect how much interest you pay over the next five years on your car loan.

Bank Auto Loan vs. Credit Union Auto Loan

When you buy a car on credit, you will go with a loan. (Unless, of course, you are lucky enough to be buying a car in cash!) Most people (over 50 percent) go with a bank loan. However, did you know you could save a sizable chunk of money by going with a credit union auto loan?

Bank car loans and credit union car loans are different, and each offers unique advantages. When you are selecting a car, use these quick facts to help you decide which type of loan is best for you and your situation.

Advantages of Bank Car Loans:
* Convenience. Your car dealership may make it more convenient for you to apply for a bank loan (they make a commission on dealership loans with certain banking institutions)
* Although payments may be higher, they are easy to make online or through any banking institution
* Easier to get a loan through a big bank if you have bad credit (although you will pay more)

Disadvantages of Bank Car Loans:
* Higher interest rates than credit union loans (almost always)
* You will pay more for your car in the long run with a loan from a typical bank, since these car loans are lower than bank car loans for both used cars and new cars
* Because banks operate for profit, you pay more for late fees and additional services

Advantages of Credit Union Car Loans:
* Lower interest rates than bank loans (generally)
* Easy online payment options
* Other services available (most are full service, offering savings, checking, mortgages, credit cards, etc.)
* Anyone can apply to be a member (many are open to everyone living in a certain state or community, although some are restricted to employees of a certain company)

Disadvantages of Credit Union Car Loans:
* May be physically located further from your home than your local bank
* If you have a checking account with one, and you often get cash out at ATMs, you may end up having to pay fees for this service at certain locations
* It can be difficult for certain individuals with very poor credit scores to qualify for an auto loan

About the Author:
Workers Credit Union is a credit union in Massachusetts that provides a full range of products for individuals and small businesses. They are one of the most outstanding and progressive financial institutions. (http://www.wcu.com)

Article Originally Published On: http://www.articlesnatch.com

Tags: credit union massachusetts

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