How a Credit Union Auto Loan Works

Credit union auto loans are increasingly popular because they usually come with lower interest rates than a loan through your bank or the financing you get at the dealership. However, it’s important to understand how a credit union auto loan works before you apply so you’re not surprised by the process. The best way to find out if a credit union auto loan is right for you is to visit a local branch and see what the auto lending process looks like, but you can also find out if you qualify for an auto loan by applying online.

During the application process, a credit union will typically ask for proof of income in order to make sure you’ll be able to repay your auto loan. This can include copies of pay stubs, tax returns and other documentation. They may also ask about your other expenses, such as housing or recurring monthly bills. Once they have all the necessary information, they’ll let you know if you’re approved and provide details of your auto loan.

If you’re new to getting a credit union auto loan, it may take several weeks or longer for your membership to be fully established before you’ll be able to apply for an auto loan. That’s because most credit unions are membership-based and require a certain level of trust from borrowers in order to approve them for any type of financial product, including auto loans. You’ll likely have to meet a minimum credit score and debt-to-income ratio as well, though some lenders offer less rigorous requirements than others.

Most credit unions offer the same types of terms for auto loans as banks, and they’ll usually be able to approve you for a new or used car loan with a good credit score and a solid history of repayment. They might also have a few different options available, depending on the kind of car you’re looking for or your credit profile.

One example of a credit union that offers a new or used car loan is Consumers Credit Union (CCU). Its auto loan applications can be completed online or in person at one of its branches, and the process is relatively simple. It’s also possible to use the online prequalification tool to check financing figures without affecting your credit score and to bundle mechanical repair coverage with the auto loan through CCU’s ForeverCar service. In addition, the company’s rates are often 2 percent or more lower than those of other lenders. This can save buyers hundreds of dollars in the long run.