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Consumers CU, PenFed, and NASA FCU are the best credit unions for auto loans
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Updated on May 1, 2023
Reviewed byCierra Murry
Fact checked by
Michael Rosenston
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We independently evaluate all recommended products and services. If you click on links we provide, we may receive compensation. Learn more. Credit unions are member-owned institutions known for offering relatively low loan rates, accessible customer service, and flexible borrower requirements. So if you’re shopping around for an auto loan, a credit union could be an excellent place to look. This is especially true if you’re already a credit union member. To make it easier to compare loan options, we examined 20 auto loan lenders, looking at key factors like loan features and costs, borrower requirements, and membership criteria. Here, we’ve rounded up the best credit unions for car loans, all of which offer low rates and favorable terms. The Best Credit Unions for Car Loans The Best Credit Unions for Car Loans Final Verdict How to Choose FAQ Other Auto Loans Pros & Cons Pros Same-day funding available Flexible loan amounts No origination fees Cons Late payment fees apply Co-signers not permitted Credit score requirements not disclosed Why We Chose It Unlike some competitors that take a few days (or more) to disburse auto loans, borrowers may receive their PenFed Credit Union car loan as soon as the same day of approval. This makes it a convenient option if you need your loan funds fast. Borrowers also benefit from flexible repayment terms and loan amounts, and no added costs like origination fees or prepayment penalties. While PenFed discloses its APR range, which is helpful, its maximum APR is fairly high. It also charges late payment fees of up to $29 and does not allow co-signers. Overall, it isn’t very transparent about borrower requirements either. But it offers enough benefits that it’s still worth considering, especially because PenFed membership is open to anyone. Borrower Qualifications Vehicle Qualifications Pros & Cons Pros No minimum credit score requirement Allows co-borrowers and co-signers Available in all 50 states and Washington D.C. Cons Maximum APR not disclosed Limited repayment terms Late payment fees apply Why We Chose It Unlike some lenders that require a good credit score or better, Consumers Credit Union doesn’t have a minimum credit score requirement. This means it could be an option for those with thin credit files or poor credit. Just remember that your rates will likely be higher if your credit isn’t great. Car loans from Consumers Credit Union are available nationwide and range from $500 to $350,000, making it an option for many borrowers; you’ll find new, used, and refinance loans available. This lender also offers a relatively fast funding time, with loan funds available as soon as one day after approval. Rate discounts are available for members, and borrowers don’t pay origination or prepayment fees. Despite these perks, Consumers offers limited repayment terms compared to competitors. Late payment fees of up to $29 also apply if you get behind on a payment. Borrower Qualifications Vehicle Qualifications Pros & Cons Pros Potential for very low rate Flexible repayment terms Co-borrowers and co-signers allowed Relatively low minimum credit score requirement Cons High minimum loan amount Max loan amount is relatively low Relatively long loan disbursem*nt timeline Why We Chose It For borrowers with strong credit seeking low-rate auto loans, NASA FCU could be a good choice. As of publication, its rates start lower than the Q4 2022 national average of 6.07%. Borrowers won’t pay any origination fees or prepayment penalties with NASA FCU’s auto loans, and co-borrowers and co-signers are permitted. Credit scores as low as 600 may be accepted. While auto loans from NASA FCU offer several benefits, this lender’s minimum loan amount is fairly high. If you’re looking to borrow a small sum, another credit union may be a better choice. Its loan disbursem*nt timeframe of three days is also relatively long compared to competitors, but depending on your car shopping timeline this may not be a problem (and it’s worth waiting a few days for better rates). Borrower Qualifications Vehicle Qualifications Pros & Cons Pros Car-buying service with over 900,000 vehicles Available in all 50 states and Washington, D.C. Co-signers permitted Cons Credit score requirements not disclosed No prequalification option Maximum loan-to-value ratio not disclosed Why We Chose It Alliant offers a complimentary car-buying program that allows members to receive rate discounts of up to 0.50%. Borrowers can use this program to search a database of over 900,000 vehicles, research trade-in values, and purchase a car from the comfort of home. And Alliant will deliver your new car to your door, so you don’t need to worry about haggling prices at the dealership or setting aside an entire afternoon to buy a car. Alliant offers reasonably flexible repayment terms, and borrowers can apply with a co-signer if they choose. You won’t pay origination fees or prepayment penalties. However, this lender charges late fees of up to $29, and its minimum loan amount is relatively high, so it’s not the best choice for those seeking a small auto loan. Borrower Qualifications Vehicle Qualifications Pros & Cons Pros Low rates Flexible repayment terms Low minimum loan amount Cons Fairly restrictive membership requirements Maximum loan amount not disclosed Late payment fees apply Why We Chose It For current members of the U.S. military and veterans, Navy Federal Credit Union offers auto loans with very competitive rates and repayment terms as long as eight years. Its minimum loan amount is just $250, making it a suitable option if you don’t need to borrow much. Borrowers also won’t pay origination fees or prepayment penalties with Navy Federal auto loans, though late fees of up to $29 apply. While some competitors allow co-signers, Navy Federal does not, though co-borrowers are permitted. This lender isn’t too transparent about its borrower requirements, including its minimum credit score. Unlike many other credit unions, its membership requirements are fairly strict—it’s only open to those who are affiliated with the U.S. military. Borrower Qualifications Vehicle Qualifications You have several good options when it comes to auto loans from credit unions. While credit unions require that you become a member to borrow, our winners have flexible, easy-to-meet membership requirements. If you have bad or limited credit, Consumers Credit Union may be worth considering. Others, like NASA FCU and Navy Federal, stand out for offering impressively low rates for auto loans. PenFed is worth considering if you want a fast loan, while Alliant has a great car-buying service if you want to get everything done in one place. Several types of lenders offer auto loans, including online lenders, traditional banks, credit unions, and loan marketplaces. With an online lender, you’ll likely see a fast approval process and low-rate loans, but with strict requirements for borrowers, and you may not receive the same level of customer service you’d get with a traditional bank or credit union. Traditional banks and credit unions will likely offer similar customer service experiences, though you may need good or excellent credit to qualify for an auto loan with a traditional bank. Credit score requirements could be more flexible with a credit union. In general, credit unions offer lower rates on auto loans than traditional banks (and local credit unions may provide better service). Loan marketplaces provide a variety of auto loan offers from different lenders, allowing you to compare easily. But the selection will vary depending on the marketplace’s partner lenders. Compare options from multiple lenders and marketplaces to find the best possible auto loan. While loan marketplaces let you compare multiple lenders in one place, they don’t necessarily offer an exhaustive list of loan options. It’s smart to research lenders independently in addition to comparing loans on marketplaces. Many credit unions offer online applications for auto loans, and you may also be able to apply over the phone or in person. Before you apply, it’s smart to check your credit reports to get some insight into how likely you are to be approved, and with what rates. Ensure the information on your reports is accurate and dispute anything that looks inaccurate. Your lender will likely have specific requirements related to borrower credit, income, and more, although these may not be disclosed. Some may permit co-signers, while others may not. When you apply for a loan, you’ll need to provide personal information, like your name, address, and more. You’ll also be required to share information about your employment, income, and debt. Your lender will also usually need a copy of your driver’s license and car insurance information. The loan application process is fairly quick, but the timeframe for loan approval and disbursem*nt can vary. In general, you can expect an approval decision within 24 hours and loan disbursem*nt within a few days after approval. As you compare car loans, ask lenders how long approval and funding typically take. This could give you some insight into when you’ll receive your loan, and it may be important for your car-shopping timeline. The best option for you depends on your needs and what you’re looking for in a lender. In general, credit unions may have more flexible borrower requirements and offer more personalized service than banks. It’s possible loan rates may be lower with a credit union too. But it’s still smart to compare different lenders before you apply for financing. Credit score requirements vary by credit union. Some credit unions require that borrowers have good credit, while others work with borrowers who have poor or limited credit. As you compare lenders, be sure to ask about credit score requirements. If you’re having trouble qualifying, check out our picks for the best car loans for bad credit. It may be easier to get a loan from a credit union than a bank, but it depends on the lender. Certain credit unions may overlook poor credit as long as a borrower meets other requirements. You will typically need to be a member of a credit union to get a loan, though. Membership requirements vary. According to Experian’s State of the Automotive Finance Market report, the average rate for car loans from credit unions was 5.49% in Q4 2022. A favorable rate would likely be around or below that average. The Balance is dedicated to providing consumers with unbiased, comprehensive reviews of auto loan lenders. To rate providers, we collected hundreds of data points across more than 20 auto loan lenders, including interest rates, fees, loan amounts, borrower requirements, and vehicle requirements, to ensure that our reviews help users make informed decisions for their borrowing needs. We also conducted a survey of 1,016 auto loan borrowers for attitudes and opinions about lenders and the loan process. Article Sources NASA FCU. "Auto Loans." Experian. "State of the Automotive Finance Market Q4 2022." Alliant Credit Union. "Rates." Navy Federal Credit Union. "Auto Loan Rates."Best Credit Unions for Car Loans of 2024
Best for Fast Loans : PenFed
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Best for Bad Credit : Consumers Credit Union
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Best for Low Rates : NASA Federal Credit Union
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Best for Car-Buying Program : Alliant Credit Union
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Best for Military Affiliation : Navy Federal Credit Union
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Final Verdict
Guide to Choosing the Best Credit Union Auto Loan
Types of Auto Loans
How To Compare Credit Union Auto Loans
How To Apply For an Auto Loan From a Credit Union
Frequently Asked Questions
Is it better to finance a car through a credit union or a bank?
What credit score do you need for a car loan from a credit union?
Is it harder to get a loan from a credit union?
What is a good interest rate for a credit union car loan?
Other Auto Loans
Methodology
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