Choosing how to finance your vehicle is an important choice. With the rising cost of vehicles and the rising cost of interest, you really can’t afford to make the wrong choice. It helps to understand the different types of loans that are available from different sources such as a bank vs credit union auto loan. Keep reading to learn more.
According to Statista, there are currently 4,853 credit unions in the United States. Using a credit union for your auto loan has many advantages. Credit unions usually offer lower interest rates. Often these rates are about 2% lower than a bank. There are also sometimes fewer requirements for the loan. Once you’re a member you can obtain a loan easily even if you have a bad credit score. Other advantages include flexible terms and personal service. Credit unions are often smaller than big bank chains so they have the flexibility and time to work more one-on-one with individuals.
If you aren’t a member of a credit union, then you might want to consider financing through a bank. This is often considered a much better option than financing through a dealership. A bank will help you get the most out of an auto loan, whereas a dealership is focused on simply making money off the sale of the car. Some banks may offer you special discounts because you already have an account with them.