Credit unions are popular. In fact, 98 million people in the U.S. are members, according to the National Credit Union Administration (NCUA), and they are one option to consider when weighing lenders for a subprime car loan.
Whether credit union loans for bad credit are suitable for you may become clearer when looking at some of the main options together.*
Credit union loans for bad credit – a closer look
Direct-to-consumer and indirect financing are two of the avenues available when seeking auto loans, and credit unions are among the direct providers. They are not-for-profit organizations, owned and operated by their members, that aim to pass on competitively priced products and services to those members, says MyCreditUnion.gov, the NCUA’s consumer website. Membership criteria vary from union to union. A local credit union offers the chance to go into brick-and-mortar premises and talk to someone about a loan, and qualified applicants, even those with bad credit, may be able to get approved for a car loan before visiting a dealership.
Banks and online lenders
Banks and online lenders are two other options for direct financing and, like credit unions, could offer the chance to get pre-approved for an auto loan. Lenders that operate online, like RoadLoans, offer the convenience of applying for a loan in your own time, whenever it suits you. In addition, RoadLoans accepts applications from people with all types of credit. Its straightforward process means you can apply and get a decision quickly. Approved applicants can shop for a vehicle, priced within the loan amount for which they have been approved, at a local dealership.
Dealerships for cars and loans
When looking at indirect financing, dealerships provide another choice. They can be a convenient way to get both a vehicle and financing in the same place, and long operating hours, including evenings and weekends, can add to this appeal. Dealerships may also contact a number of different finance companies to offer you financing. However, the Federal Trade Commission recommends seeking offers from different dealers as well as other lenders in order to find financing that best suits your situation.
Visit the Consumer Financial Protection Bureau website for more information about auto loans and answers to common questions.
* “Bad” or “Poor” credit generally is considered a FICO score around 600 and below by sources including the Consumer Federation of America and National Credit Reporting Association (reported by the Associated Press), Bankrate.com, Credit.com, Investopedia, NerdWallet.com and others. The Congressional Budget Office identifies a FICO score of 620 as the “cutoff” for prime loans. FICO scores are not the sole factor in lending decisions by RoadLoans.com and Santander Consumer USA.