Picture this - you're doing some car shopping and just found your perfect one that has your unique style written all over it. The car salesperson approaches and says “Is this the one?! Let’s get you set up so you can drive home in your new car today!” What’s your next move? Are you rushing to submit an auto loan application or are you going to do some research for the best places to get an auto loan?
Deciding how to pay off an auto loan isn’t the same for every borrower and it varies based on your spending needs. One borrower may opt into doing a monthly payment plan to establish their credit score, while another might decide to pay the total cost of the auto loan in advance and avoid paying interest.
"Do I need to be part of the military to join a credit union?" This is a common question from prospective new customers, mostly because people have seen all the advertising about military credit unions (think Navy Federal Credit Union). The perks include low loan rates, higher interest in savings, and exclusive discounts. They're discouraged and think it's impossible to get access to these great money-saving perks. But there's good news - Other credit unions offer the same, similar, or better perks, all without needing ties to the military to join!
As an adult, you have a credit report that summarizes how you've handled your credit accounts which are reviewed and scored. Think of it as your credit report is your new report card, and your credit score is your new GPA. A negative inquiry or delinquency on your report can drastically lower your credit score. This can take time to restore which you might think will ultimately put a hold on many parts of your life, like financing a car.
When applying for an auto loan from a lender (like a bank, credit union, or even a dealership) you're likely to hear about interest. Interest on an auto loan is essentially the extra fee you pay for using the lender's money to buy a car. Luckily, the interest you'll accrue (and eventually owe) on your loan is spread out over the life of your loan, so you're not required to pay the fee back all at once.
Need a stress reliever in this car buying process? You may want to look into getting pre-qualified on an auto loan through your preferred lender. Better yet, look into joining a credit union to get pre-qualified since credit unions typically offer better rates other lenders may not.
It’s no surprise credit unions often get overlooked. Many people believe all credit unions are ridiculously strict with membership requirements or that you can’t even step into a credit union unless you’re a member. With all of these misconceptions about credit unions, many don’t even know the real reason why credit unions exist and what membership entails.
When finding a financial institution, you want to make sure it’s a place you trust, fits your needs, and serves your core values. While some choose to store money in a jar or coffee cup at home, most look to credit unions and banks. This is because there’s an opportunity for financial growth, financial literacy, and lending solutions.
What are your initial thoughts when you hear or see the words "no payment needed" for an auto loan...? Is it a relief to hear that you're not forced to come out of pocket to pay a percentage of an auto loan that's already thousands of dollars? Or do you think it's a trap for you to eventually default on your loan because you failed to put 20% down?