Consumer Car Buying Advice Blog

Checking with a credit union first might be able to save you money even if your credit is less than perfect

Our experience

Although it may not result in a loan approval, if you have auto credit issues and you belong to a credit union you at least owe it to yourself to apply there first.

The fact is, here at Auto Credit Express for over twenty years, we’ve been helping car buyers with credit problems find dealers for their best opportunities at approved auto loans. During that time and although it usually doesn’t happen, we have seen situations in which credit-challenged car shoppers have received an approval from their credit union.

Many consumers, however, are both unfamiliar and confused over what credit unions really are and how they work, so we thought now would be a good time to address this issue.

Credit unions

In order to understand exactly what credit unions are you first have to be aware of what makes credit unions different from banks.

Unlike most lending institutions – particularly large banks – that are publicly owned corporations, credit unions are nonprofit organizations owned by their member customers. Since credit unions don’t have to worry about answering to stockholders about profits, they often price their products more aggressively than banks. This means that, in many cases, credit union auto loans often feature lower interest rates when compared to those of bank auto loans.

We use the word “often” because, with that being said, it’s not always the case because some credit unions act like banks while some very large banks, because of their size, have the ability to offer customers very competitive car loan interest rates.

Personal service

Another common difference between banks and credit unions is customer service. Because credit unions are typically smaller and have fewer employees, the service you receive from them is usually more personal.

At the same time, banks, because they are typically larger, can offer services such as online and mobile banking as well as automatic bill pay for loans and utility payments. Banks are also more likely to feature additional amenities such as 24-hour customer service hotlines – an advantage that’s usually not available to credit union members.

Customer fees

When it comes to charging their customers fees, however, banks are notorious for adding them to everything from checking accounts, overdrafts and ATM machines to teller fees and missing minimum balance requirements for savings, checking and investment accounts.

Credit unions, in comparison, typically shine in this area. While most credit unions will charge their customers for overdrafts or returned checks, they usually refrain from charging checking, savings or teller fees. ATM withdrawals are, in most cases, also fee-free unless the machine being used is outside their network. It should also be noted that, even though credit unions are local, many of them participate in one of the nationwide networks of credit union ATM machines that allow members, wherever they are, to use them at no additional charge.

Credit union auto loans with bad credit

Applying for an auto loan at a credit union is easy, although it usually has to be done in person. In most cases, you have to live in the area served by the credit union. Unlike banks, credit unions usually require you to become a member before applying for a car loan which means you’ll first need to open a savings account (called a share account).

The most important thing to remember is that if you have issues with your credit, you may not qualify for a credit union car loan. Unlike new car dealers that work with lenders that offer high-risk car loans, credit unions typically don’t approve auto loans to applicants with the lowest FICO scores.

So what should you do if you’re turned down for an auto loan at your credit union?

We’re here to help

Even if you don’t qualify for a credit union auto loan, we want you to know that a BHPH (buy here pay here) dealer usually isn’t the only other option.

Here at Auto Credit Express we specialize in helping people with car credit difficulties find dealers that can give them their best chances at approved auto loans.

So if you’re serious about getting your auto credit back on track, you can begin the process now by filling out our online auto loans application.

Tags: Bad Credit, credit unions

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