Credit union car loans can be a good option if you are in search for a loan to finance a brand new or used car purchase. You can also use this type of loan to refinance your vehicle and get out of a harder financial situation brought about by an expensive car financing. This is because loans offered by car unions usually have lower interest rate that could range from 4-9%. In addition to this, there are many institutions that are willing to offer this type of loan with terms that could cover up to 7 years. However, before you apply and obtain this type of loans, you need to take note of some important considerations such as the following:
1. Credit union car loans offer longer loan terms
Compared to other loan providers, credit union can possibly offer longer loan terms that could reach up to seven years as the maximum. The monthly payments for this loan are relatively lower since the premiums are calculated based on a longer loan term. This arrangement however can be very expensive. You might end up paying more than what the car actually costs. In case you intend to finance a car using a loan from a credit union, you might need to consider shorter loan terms to avoid paying more than what is necessary.
2. Credit union rates are more stable
Compared to other credit institutions such as banks, the loan rates of a credit union are more stable. This is because of the conservative techniques used by these loan providers in handling car financing. This is the reason why credit unions are not directly affected by the sudden changes of the nation’s economy.
3. Credit unions offer loans to a smaller sized audience
Another important consideration involved in loans provided by credit unions is its choice of customers. Credit unions usually offer loans to its members. This means that when you are a member of a credit union, you can easily obtain loans from them and at the same time enjoy the privileges extended to its members.