How to Get an Auto Loan From a Credit Union

A woman driving a car with sunglasses on, top-down, and pointing up at the camera.

Credit unions are well-known for their friendly, member-first services, so if you're considering where to get your next car loan, find a credit union to help you. With a transparent loan process, access to lower interest rates, additional membership benefits, and the right to pay off your loan early without penalties, your local credit union can help you save hundreds or even thousands of dollars. Credit unions provide individualized support and can help you secure an auto loan for a new car or used car. Take a closer look at how to get an auto loan from a credit union.

What is a Credit Union?

While banks are for-profit financial institutions that aim to generate profits for their shareholders, credit unions are not-for-profit financial institutions that share profits with members. These organizations offer many of the same types of financial products, such as certificates, home loans, auto loans, and savings accounts. They also tend to be very regionalized, and their core focus is serving their communities with higher savings rates, lower loan rates, lower fees, and more member-friendly services.

Credit unions are governed by a board of directors elected by and from its membership. Credit unions can give more favorable loan terms to their members because they reinvest profits back into their members rather than pay stockholders. These terms can include:

  • Flexible loan terms
  • Lower interest rates
  • Lower minimum requirements (such as lower initial down payments or credit requirements)

Benefits of Getting an Auto Loan From a Credit Union

When you're shopping for an auto loan, it's important to compare auto loan rates and terms and find which lender will give you the loan options for the best auto financing. The key benefits of choosing credit unions over standard bank loans are:

  • Access to lower competitive rates than most commercial or national bank chains
  • Options to individualize the loan terms and duration based on your unique financial situation
  • Local member service throughout the life of the loan, with a team available to answer your questions and provide helpful resources
  • Membership to the credit union, which can help you get loans in the future (such as a home mortgage), savings accounts with higher rates, and unique membership perks 

Auto loans from a credit union can give you both favorable car payments that fit your budget and set you up for a future with great support.

Preparing for the Auto Loan Application

Before you apply for an auto loan, gather these details:

  • Proof of income and employment history
  • Required forms of ID, such as your driver's license or state issued ID
  • Your budget and the anticipated price of your preferred vehicle - calculate how much car you can afford or your monthly auto payments

It's also a good idea to review your credit score and credit history to ensure your credit report doesn't contain any errors that might impact your eligibility to get a loan. Use ProFed's Credit Score Tool inside ProFed Digital Banking to keep tabs on your credit and take advantage of exclusive offers.

How to Get an Auto Loan from a Credit Union

Credit unions often provide both in-person and online auto loan applications. Some credit unions, like ProFed Credit Union, offer a mobile banking app to easily manage your application, accounts, and loan payments. Carefully read through the credit union's loan application and follow all the steps. Be as accurate as possible, and note how long you'll need to wait for a response.

Understanding Loan Terms and Conditions

The different terminology is important to understand when it comes to vehicle loans. Some of the terms you'll need to know are:

  • Interest rate, or the annual percentage of additional money you'll owe on top of the lump sum of money you borrow
  • APR or annual percentage rate, which includes both the interest rate and any additional fees the credit union charges
  • Term length, or the number of months the loan will last before the total amount of money is due back
  • Monthly loan amount, or the monthly payment total (including the principal, interest, and fees) you'll pay each month

Your credit union representative can walk you through all these terms and answer any questions.

Managing Your Auto Loan

Once you've secured your auto loan, there are a few things you can do to make sure you make each monthly payment on time and pay off your loan successfully:

  • Make sure there is room in your budget for the monthly payment before agreeing to the loan
  • Sign up for automatic payments, so the money automatically transfers each month to minimize the risk of late payments
  • Reach out to your credit union if you think you may not be able to make full monthly payments, because they may be able to help revise your loan terms and manage the payments
  • Learn more about how different credit unions can help you manage your auto loan

Reach Out to ProFed Credit Union to Apply for Your Auto Loan

At ProFed Credit Union, we offer our members favorable, accessible auto loans. Credit unions offer low rates, helpful resources, and follow regulatory and compliance standards to keep your money safe.

ProFed also makes the car buying process easy by helping you get pre-approved! Apply for an auto loan online in less than 20 minutes. After you apply and get pre-approved for your auto loan, you can shop for and buy your car at that great, low rate, saving you time at the dealership.

Apply online, call us, or visit us at a nearby location to talk about your next auto loan.