Everything You Need to Know About Credit Union Car Loans
There are many available choices for potential car buyers when looking to obtain auto loans in New Mexico. Select dealerships offer financing, and of course there is the traditional approach through banks. Many people fail to consider obtaining an auto loan from a credit union. However, credit unions offer several important advantages that you may not receive when dealing with a bank.
How a Credit Union Is Different from a Bank
Credit unions and banks offer similar financial services and products, including auto loans. The main difference between the two is their business structure.
A bank is a for-profit corporation, meaning that any profits earned are returned to the bank's stakeholders. A credit union is a not-for-profit cooperative. This means that when you join the credit union, you become a part-owner. The cooperative will pass its profits on to you and the other members in the form of fewer fees, better interest rates and dividends on your savings. These benefits are important to think about when looking for an auto loan.
What You Get Out of Your Membership
Credit unions are known to have eligibility requirements for membership, but they are fairly broad. While some may cater specifically to a particular workforce sector or community, most will not disqualify you if you do not belong to a specific group.
Once you become a member, you will not only have access to many of the products and services that you can get from a bank, such as credit cards, savings accounts, and personal loans. You will be able to take advantage of incentives and discounts from local businesses that partner with the credit union to save its members money. Credit unions also tend to offer a more personalized touch when it comes to managing your finances than you would find at a bank.
When it comes to buying a car, you will find similar loan products available at a credit union as you would find at a bank, including loans for purchasing either a new or used car, lease buyouts, and refinancing of an existing car loan. You will also often find a more competitive interest rate than you are likely to find at a bank, even if your credit is not the best. This is important as interest rates are on the rise and you want to get the lowest rate available to save you money over the life of your loan.
What to Do Before Buying a Car
The first step to take before even setting foot on a car lot is to shop around for the best interest rate. You won't know for sure whether or not a rate is good until you shop around and compare it with other rates that are available.
You might just find the best rate at a credit union. Even if a credit union doesn't offer the lowest rate, the personalized service that you receive from a credit union, the trust you build with its staff, and the simplicity of the process may be worth more to you in the long run.
Once you've found the interest rate you want, inquire about pre-approved financing for your auto loan. Having your loan pre-approved is to your advantage when you are ready to start shopping for a car because it puts you in a stronger position when negotiating at the dealership and helps to streamline the car-buying process overall.
Buying a car, whether new or used, is a big step. It can be helpful to have the assistance of friendly and knowledgeable financial staff, such that you find at a credit union, to help you find the loan you need to purchase the car you want. Let Del Norte Credit Union help you find the right auto loan for you! Contact us today for more information.