In today’s world, an automobile is a very important thing considering its wide range of uses. It facilitates the most commonly used mode of transport which is movement by road.
It not only enables movement of people from one place to another but it also allows for commodities to be moved from the factories to the market hence promoting trade.
Owning a personal vehicle makes it even more convenient for you to travel and engage in other activities. One major drawback is the price. Getting a good vehicle is not cheap thus the need for a loan. You can also see this link https://www.wpcu.coop/personal/auto-loans to learn more.
What is it all about?
A credit union can be viewed as an organization formed to provide financial help to its members by providing them with credit when they need it.
Although it bears similarities with other financial institutions such as banks it is different in the sense that it is a non-profit organization by nature as opposed to banks that are profit-oriented.
This is one of the reasons why it is able to serve its members better. The organization is relatively small in comparison to banks hence the needs of the members can be easily met at a personal level.
How does it work?
The main principle that governs the union is merging of resources to create a common pool. From this, a certain amount of money can be given to a member as loan upon request. They can then pay it back with interest over a period of time according to the terms agreed upon.
The terms are more favorable than those of other financial institutions hence the reason why most people prefer the credit unions when in need of financial assistance.
When you join the organization you become a member hence you will be entitled to whatever forms of return that has been earned via interests charged on the loans. This can be given in form of a dividend or subsidized charges.
What are some of the requirements?
As it is with all legitimate groups one has to meet certain requirements to become a member. The requirements of a credit union are few and so eligibility is usually not something to worry about.
To be able to join most will require you to be in a certain type of occupation, or be of a certain ethnic group, or be residing in a certain locale. This is because they are meant to carter to the needs of the members at a personal level and so it requires a group of people with common needs and interests.
Another requirement that is of great importance is creditworthiness.
Why get an auto loan from them?
Since the union is formed with the particular intention of giving credits to members at favorable terms it is a great option when taking an auto loan. Here is why.
- Low interest rate
As a member when you request for a loan it will be granted to you at a lower rate of interest than if you did so from a bank.
This further encourages more people to borrow from the union hence boosting the group’s money brought by the interests being paid.
As mentioned before, the effect circulates back to the members in the form of either dividends or lower fees. Thus the more money is borrowed the lower the interest rates for the members.
- Simple process
Some people dread applying for a loan because of the cumbersome process involved. With credit unions the process is simpler and faster owing to the small size of the organizations. The presence of online platforms has further made such transactions easier. You can request for the loan on a website or using an app on your mobile phone.
- Friendly customer service
You get to communicate at a personal level like you would when holding a casual conversation with a friend. Although your credit score matters it is not a must that you have a perfect one for you to qualify for the loan.
Even with a low score you can still communicate with them and find a way forward. This is made possible by the flexible nature of the unions. The policies are made for the benefit of the members.
- Easy to join
In the past they were meant for localized groups of people such as those who are in the same line of work or under a common entity.
Nowadays, this has changed and most organizations expand beyond the local geographical and occupational constraints. They allow all people as long as one meets the requirements and shares the common interest of the group. Click here to learn more.
Conclusion A credit union aims to promote the welfare of its members by availing credit to them at affordable costs. The interest rates are low, the policies are flexible, and the whole process is simple. Thus it is a wise option when getting an auto loan. When looking for a union that fits you start by searching within your community first to ensure that you join one that properly understands your needs.