 TITLE: Do Credit Unions Offer Better Car Loans? CONTENT: What Makes Credit Union Auto Financing Different?\n-------------------------------------------------\nWhen it comes to financing your car, there are several benefits of using a credit union, as opposed to a dealership or bank.\n*   You may have a better chance of getting approved for a loan. Because they are smaller, focused on their communities and owned by their members, credit unions tend to be more understanding of members who have less-than-perfect credit scores. This can make a credit union a better option than a bank if you have poor credit or have a thin credit file (few or no credit accounts and a limited credit history).\n*   Credit unions generally offer lower interest rates than banks or auto dealerships. Because credit unions aren't profit-focused the way banks are, they don't need to make as much money on your loan. The average interest rate for a 48-month new car loan from a credit union was 3.75% in March 2019, compared with 5.03% for the same loan from a bank, according to the National Credit Union Administration.\n*   Banks and dealerships typically require you to take out a minimum auto loan amount. Credit unions often have lower minimum loan requirements or none at all. For instance, a $5,000 loan to buy a used car might be too small for a bank to finance, but not for a credit union.\nThere are also a few downsides to financing a car through a credit union.\n*   You have to be a credit union member to apply for a loan. If you're already a member, that's not a big deal. If you're not a member, chances are there's a credit union you could join. You may be able to join a credit union based on your employer; your geographic location; or membership in a place of worship, school or homeowners association. There are credit unions for government employees, union members, teachers, firefighters, members of the military or military veterans, postal workers, and faculty and employees of colleges and universities. Plus, most credit unions allow members' family members to join too. If your mom belongs to a credit union for school teachers, you can join even if you're not a teacher. You can use the National Credit Union Association (NCUA) Credit Union Locator to find credit unions that may be open to you.\n*   Smaller credit unions usually don't offer all the bells and whistles that bigger banks do. For instance, a credit union may not offer online banking or a mobile banking app, may not have ATMs and may have only a few branch locations. This can be inconvenient if you're using a credit union for your daily banking needs, but if you're using a credit union primarily to get an auto loan, it shouldn't be a major problem. END