Getting ready to buy a new car? Before you head to a bank for an auto loan, it’s worth checking out your credit union options. Credit union car loans are often easier to obtain, with lower interest rates. In fact, there are over 5,600 federally insured credit unions in the United States, and auto loans make up about a third of their business.

Why get an auto loan from a credit union?

Here are six great reasons to consider working with a credit union next time you need an auto loan:

  • Get a loan even with a lower credit rating: If you’re just starting to build your credit, or have fair to poor credit, it might be difficult to get an auto loan. Credit unions are great for folks with lower credit scores. They’re more forgiving of those just starting out or who have a few dings on their credit reports. You might still be able to get a car loan at a traditional bank, but the fees and interest will undoubtedly be higher.
  • Lower interest rates: Speaking of interest rates, credit unions typically have lower ones than banks. That’s because credit unions are nonprofit organizations, whose financial gain goes right back into the business. This allows them to offer lower interest rates on loans and higher interest rates on savings accounts.
  • A personal, community-based touch: One of the nicest features of credit unions is that they’re smaller and community-based, unlike national banks. You’ll get more personalized service when you work with a credit union for your car loan.
  • Joining is easy: There’s almost always a credit union for which you qualify. Some are based on location, while others are open to people based on certain professions, religions or government service. Many credit unions allow family members to join, even if they don’t qualify under other circumstances.
  • Car loans are a major part of their business: Car loans make up about a third of credit union lending. They’re not only familiar with car loans, they specialize in them—which means you’ll get a higher level of service along with your lower interest rate. Plus, the loan process is easy. Many credit unions allow you to apply for a loan right over the phone. Direct Financial accepts applications online, too!
  • Reap other credit union benefits: Finally, once you join the credit union, you’re eligible for all of their other benefits: high interest savings accounts, personal loans, credit cards, no-fee ATM services and more. You might come for the auto loan and stay for the other favorable terms.

When it comes to car loans, credit unions are often one of the best options available. Before you finance through a bank or your dealership, call your local credit unions to compare rates. Visit Direct Financial online or call us at 800.966.8200 for more information.