Times are tough and spending all of your hard- earned money on a new car is not that practical, which is why a loan is a good solution. However, the banking world seems to experience instability and with the unexpected failures, bankruptcy, and buy- outs on the news, getting a loan for personal reasons and for your dream car is almost impossible to even think about. If you are looking for an alternative, why not consider visiting a community bank?
Credit unions, or community banks, are financial institutions that let their members borrow and save money at very reasonable rates. They may be alike with banks in a way but there is a great difference between banks and credit unions. Banks function for profit while credit unions exist mainly for service.
How Does A Credit Union Work?
Whats unique about credit unions is that instead of having a single person, or a company to provide the investment to put up a financial institution, ownership is shared equally regardless of how rich a member is compared to the others. Assets are pooled together to afford providing loans and other financial services among members.
A member also has to share a common bond with other members in order to be eligible to be part of the union. Most credit unions are groups of people sharing the same religious beliefs, business circle, or other kinds of organization. The governance is democratic with the Board being made up by elected members of the union.
How Can it Help You?
Versus other financial institutions, credit unions are a great resource for loans because of the following reasons:
1. They have competitive financing rates for members. Loan rates are much lower and even the charges or loan fees are kept to a minimum.
2. Credit unions give shorter loans which will give you a lot of savings from interest compared to longer loans that tends to have higher interest rates.
3. Because they only handle member accounts, you will have a more personalized handling of your personal financial needs.
4. Unlike banks, credit unions are more stable, impressive track records, and still continue to grow.
5. Although being a member is not easy, going through the membership process is doable and you get to enjoy the benefits immediately as soon as you successfully become a member.
Why Should You Choose Credit Unions?
The point of having personal and auto loans from a credit union instead of any financial institution is their competitive financing rates. But technically, a small institution gives faster services because decisions are done locally between members.
Banks charge a lot of money for the processing of your loans because of so many things to accomplish before completing the loan approval requirements. The amount of money you will spend on these miscellaneous fees before having your loan could be enough for at least a month’s worth of mortgage. This kind of savings plus all the other benefits you’d get are available only from credit unions. You will have your dream car at a price that you can certainly afford.