Best Credit Unions for Car Loans

Jan 26, 2024 By Susan Kelly

If you're in the market for a brand new or used vehicle, you should not overlook the local or national credit union. Because members own them generally, they have lower rates for auto loans than banks and other lenders. For instance, the average APR for a new 60-month car loan with the credit union was 2.87 percent, compared to 4.78 percent for banks in the second quarter of 2021. The drawback to credit unions is that you have to be a member before getting loans. The requirements for membership could include living within a certain location or working for certain organizations and businesses. But, some credit unions offer membership to all members, and therefore joining could be simpler than you thought.



Navy Federal Credit Union


Navy Federal Credit Union offers some of the best rates for its members. Rates begin at 1.79 percent for new vehicles that last up to 36 months. Of course, rates rise in the longer term. They begin at 2.19 percent for vehicles of a late model with mileage restrictions and rise to 3.79% for the other vehicles (as of March 2022). The terms for used cars can extend to 72 months. The terms for new cars go up to 96 months.


While there are many sources and low rates provided by Navy Federal Credit Union, you have to fulfill the requirements for membership to benefit from these benefits. Membership is restricted to armed forces members, the Department of Defense, veterans, and family members who qualify. The full membership information is available on the site.


NIH Federal Credit Union


  • APR: 1.99% APR
  • Amount of loan: Financing as high as 125 percent determined by the latest auto ratio of loan-to-value
  • Terms Limit: Up to 84 month


The National Institutes of Health Federal Credit Union is a member of the biomedical industry and offers its members flexible terms and low-interest rates for used, new, and refinancing auto loans. You can apply to join the credit union when you're an employee of the biomedical or healthcare industry located in Maryland, Washington D.C., North Carolina, Virginia, or West Virginia, or in the case of a family member of someone who is enrolled. One of the most appealing NIHFCU loans is the online application procedure, which only takes a few minutes to get results.


LightStream


LightStream offers an entirely online service for its vast selection of car loan options. It's extremely transparent about the terms and rates, and there are no restrictions on the kind of vehicle it will finance. It also has a strong reputation for customer service, earning the highest score on the J.D. Power 2020 U.S. Consumer Satisfaction with Lending Study for personal loans.


LightStream is an online credit division that is part of SunTrust Bank. Its online lending process distinguishes it. The borrower can apply online, electronically sign the loan agreement and receive the funds through direct deposit within the next day. LightStream also offers auto loan options, including used and new dealer purchase refinancing, lease buyouts, refinancing, and classic vehicles. LightStream also offers loans that are unsecured for people with good credit. The lender's rates begin at 4.99 percent and include an 0.5%-point discount on autopay. The maximum APR on auto loans is 9.49 percent.


Pentagon Federal Credit Union


  • APR: 2.49% APR
  • Maximum loan amount: Financing up to 110 percent; $500 up to $100,000
  • Terms: 36 to 84 month


Serving members from every state and District of Columbia and the military base located in Guam, Puerto Rico, and Okinawa, PenFed Credit Union gives its members a wide range of choices for financing their cars. You are eligible to join if you're part of the U.S. military, an employee of the U.S. government or other eligible organization, or part of groups like the National Military Family Organization or Voices for America's Troops.



myAutoloan


MyAutoloan is an online marketplace that lets customers find the best rates on auto loans from various lenders. Enter your personal information on the website's online form and get loans from lenders nearly instantaneously, allowing you to examine offers side-by-side. Our research suggests that myAutoloan's rates are very low for the market. Customers can get rates of as low as 1.9 APR for brand new cars. With the requirement for a minimum credit score of 575. myAutoloan could be an excellent option for those with a lower credit score.


However, the minimum purchase amount could mean that you have to pay more for a vehicle than you originally planned to take out a loan with the company. Furthermore, myAutoloan can't allow a loan for more than ten years old cars or have over 125,000 kilometers of vehicles. Some might find these limitations to be a bit burdensome.

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