2017 Guide to Finding the Best Credit Unions for Car Loans

A credit union car loan can be an appealing alternative for borrowers. A credit union auto loan may also be a more affordable option. The issue is that consumers are not as familiar with what a credit union is, let alone what the best credit union for auto loans is.

To find the best credit unions for car loans, consumers must first know what a credit union is. Those interested in a credit union car loan will be especially interested to learn what the difference is between a regular auto loan from a large bank and a credit union auto loan.

This article will go over the difference between a regular bank and a credit union, and in doing so, it will provide a comparison between a regular bank auto loan and a credit union car loan.

In addition to outlining the details of a credit union auto loan, this article will touch on the credit union auto refinance options available to consumers. Instead of exclusively exploring the best credit union auto loan rates, this article will also explore the credit union refinance auto loan options available to consumers.

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Credit Union Auto Loan: What Is the Difference Between a Bank and a Credit Union?

If you want a refinanced auto loan credit union or a credit union car loan, you will first need to understand the difference between a bank and a credit union. Physically, the two look similar, but structurally, they are different, and this is directly related to the motives of both institutions.

There is a common misconception that credit unions are not as sophisticated as traditional banks when it comes to the sorts of products you can acquire. You can get a credit union auto loan or credit union auto refinance at a credit union the same way you can get an auto loan or refinance at a regular bank. The difference lies in where the money goes, how the ownership is structured, and the culture with which the bank facilitates loans such as credit union car loans.

If you are looking for an auto refinance credit union, you may already be familiar with the reputation of a different culture between banks and credit unions. Credit unions providing financial services like loans or a credit union auto refinance are known for being community-oriented, regional in scope, and committed to staying small in size. They are also known for their very involved membership.

The Structure of Banks vs. Credit Unions (Including Credit Unions for Loans and Refinance Auto Loan Credit Unions)

A very simple way of understanding the difference between a bank and a credit union (including credit unions for loans and a refinance auto loan credit union) is simple: one is for-profit, and the other is not.

credit union car loan

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As you have probably ascertained, banks are for-profit while credit unions, like the refinance auto loan credit union you may be looking for, are not. Banks take the money that you give them in the form of deposits and use the money to turn a profit by investing that money or loaning it out to other customers.

While this may sound unattractive compared to a credit union or auto refinance credit union, it is a practice that has been used throughout the history of banking.

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Technically, banks are not using your money for free. When you put your money in a savings account, you receive payment in the form of interest. Of course, the amount of money you pay for the banks to use your money is trivial compared to the amount of money they charge you to borrow theirs.

This money-making agenda is one of the reasons people choose to go to credit unions for their mortgages, bank accounts, or credit union car refinance.

Unlike credit unions or an auto refinance credit union, investors are calling the shots for regular banks. A bank’s management team has to answer to its investors. As a result, all of the bank’s activities have to be geared toward turning some kind of profit in order to keep those investors happy.

Even though a large part of a bank’s ability to make money rests in the availability of customers, oftentimes, customer satisfaction is satisfied in the form of bank fees and higher rates—all in the name of making money.

Credit Unions

On the other hand, credit unions are not-for-profit institutions. This is different from a nonprofit, since credit unions are not run through donations.

Credit unions, like the best credit unions for car loans, do not make the kind of profit-driven decisions that big banks do. Instead, everyone who owns an account is considered a part-owner, and they receive yearly profits in the form of dividends.

This is why there are more attractive accounts at credit unions and more features that genuinely benefit account holders or “part-owners.” The best credit union auto loan rates are made possible due to this system in which any profits are given back to the customer in the form of either dividends or better rates.

Best Credit Unions for Auto Loans in  2017

One of the ways in which the best credit union auto loan rates are possible is because credit unions make a noticeable effort to stay small and regional. If they wanted to expand, they would need a significant amount of access to funds in order to pay for advertising and resources.

As a result, many credit unions require that you live in the area in order to become a member. To access certain credit unions and their credit union car loans, you may also need to work for a specific employer or in a specific industry.

Alliant Credit Union

To qualify for Alliant Credit Union, you either need to have a job through a specific employer, be a Foster Care to Success member, live or work in a specific community, or be part of a select organization. Individuals eligible for membership at Alliant have access to one of the best credit unions for car loans.

Members have access to very competitive industry rates. With Alliant, there are loan terms that can go up to 84 months for new or used vehicles.

credit union auto loan

Image Source: Best Credit Unions for Car Loans

In addition to the credit union car loan that you can get with Alliant, you also have the option of paying back part or all of your credit union auto loan without facing any penalty, allowing you to benefit from being debt-free or significantly reducing your balance and interest payments.

Evidently, credit unions genuinely seem to care about their members instead of creating rules that work against their interests in order to pad the institution’s profit margins.

In a large number of cases, Alliant also provides same-day approvals on a member’s credit union auto loan application to add convenience to money-saving.

Moreover, members have access to a credit union car refinance through Alliant. This credit union refinance auto loan option at Alliant allows members to refinance their existing higher rate car loan at a more attractive and manageable rate.

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PenFed is a credit union created for service members. There are also other categories of eligibility for those interested in becoming PenFed members. Civilians can join by making a donation to specific nonprofits affiliated with PenFed. PenFed is another option for those looking for credit union car loans.

For a credit union car loan on new cars, there are a number of options. Members can borrow:

  • $500 to $100,000 for 36 months at 1.49% APR
  • $7,500 to $100,000 for 48 months at 1.99% APR
  • $10,000 to $100,000 for 60 months at 1.99% APR
  • $15,000 to $100,000 for 72 months at 2.74% APR
  • $25,000 to $100,000 for 84 months at 2.99% APR

For a credit union auto loan on used cars, there are also several options. Members can borrow:

  • $500 to $100,000 for 36 months at 1.99% APR
  • $7,500 to $100,000 for 48 months at 2.49% APR
  • $10,000 to $100,000 for 60 months at 2.99% APR
  • $15,000 to $100,000 for 72 months at 3.61% APR

These credit union car loan rates are available for car models between 2012 and 2017.

Credit Union Refinance Auto Loan

You may have thought your initial search for a credit union car loan would be difficult. Credit unions have more eligibility requirements than banks, so naturally, most people searching for a credit union auto loan go into the hunt believing it is going to be a little more work. Now imagine searching for a credit union car refinance. Sounds a little more complicated, right?

A credit union car refinance is possible. In fact, this option is available at PenFed with similarly attractive rates to their credit union car loans.

Consumers Credit Union

Consumers Credit Union is one of the best credit unions for car loans. Their credit union car loan also carries competitive interest rates for members. Members also have access to speedy approvals in addition to some of the best credit union auto loan rates. They have a number of rates for new and used cars, trucks, and vans:

  • 36-month loans for as low as 1.74% APR
  • 48-month loans for as low as 1.74% APR
  • 60-month loans for as low as 2.24% APR
  • 72-month loans for as low as 2.49% APR
  • 84-month loans for as low as 4.19% APR

Those who qualify can also finance 100 percent of their car purchase through a credit union car loan at Consumers Credit Union.

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Navy Federal Credit Union

The Navy Federal Credit Union is considered one of the best credit unions. You are eligible for membership if you are:

A service member who is:

  • an active member of the Army, Marine Corps, Navy, Air Force, Coast Guard, or Air National Guard
  • part of the Delayed Entry Program
  • a DoD Officer Candidate/ROTC
  • a DoD Reservist
  • a retiree or annuitant

A civilian who is:

  • a DoD civilian employee
  • a U.S. government employee assigned to DoD installations
  • a DoD contractor assigned to U.S. government installations
  • a DoD civilian retiree or annuitant

Additionally, immediate family members of those who are already members or eligible to join can also become a member of this credit union. This applies to grandparents, parents, spouses, siblings, children, and grandchildren (including those who are adopted or are stepchildren). These individuals can apply for membership and get access to financial products like a credit union car loan.

For new and late-model used vehicles, Navy Federal Credit Union members can get a credit union car loan for up to 36 months for as low as 1.99% APR,  and for a used vehicle as low as 3.79% APR.

Credit union auto loans for 37 to 60 months with Navy Federal Credit Union are 2.39% APR for a new vehicle, 2.79% APR for a late-model used vehicle, and 3.99% APR for a used vehicle.

For credit union car loans for 61 to 72 months, the rates for new vehicles are 2.69% APR, late-model used vehicles are 3.49% APR, and for used vehicles 5.29% APR. For any credit union auto loans going beyond 72 months, there are only loan options for new cars.

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Finding the Best Credit Union for Auto Loans in Your Area

The difficulty when it comes to finding the best credit union for auto loans is the restricted nature of most credit unions. You may have a friend or family member who found the best credit union auto loan rates through their credit union only to learn that you are not eligible for membership.

The best credit unions for car loans listed above were selected because they have relatively flexible membership. If you are ever trying to get into a credit union for a checking account, savings account, or credit union car loan, consider asking whether they take non-eligible members who are willing to support organizations affiliated with the credit union. This option is available for many credit unions since a lot of them are very involved in their regions and are community-based.

Check with your employer to see if your company is affiliated with any credit unions or use any number of credit union locators online and search based on location, organizational membership, job, and more. Finding that you are eligible to join a credit union could open the door to finding the best credit union for auto loans that you need.

If I Want to Get a Credit Union Car Loan from a Credit Union, Is It as Legitimate as a Bank?

Credit unions are legitimate institutions, and deposits are guaranteed in the same way that bank deposits are. In fact, there is a United States federal agency, the National Credit Union Administration, dedicated to regulate and oversee federal credit unions and insure the deposits in federal credit unions and most state credit unions.

If you are searching for a credit union car loan, you should not be worried about the legitimacy of credit unions as an institution—just check that you are getting the best credit union auto loan rates at a particular institution.

You May Be Eligible for the Best Credit Unions for Auto Loans

Some people are eligible for the best credit union for auto loans, and they do not know it yet simply because they have not done the research.

If you like the prospect of a not-for-profit bank that shares the wealth with its customers (or partners), a credit union may be the choice for you. You could have access to some terrific rates on a credit union car loan. Search for credit unions based on your location, organizational memberships, and employer and gain access to savings with a credit union auto loan.

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