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7 Best Credit Unions for Car Loans
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If you’re shopping for a new or used car, don’t overlook a local or national credit union. As member-owned institutions, they typically offer lower auto loan rates than banks or other lenders. For example, the average APR for a 60-month new car loan at credit unions was 2.87% compared with 4.78% for banks, as of Q2 2021.
The catch with a credit union is that you must be a member to get a loan. Membership requirements may include living in a particular area or working for specific organizations and companies. However, some credit unions have nationwide membership, so joining may be easier than you think.
We have identified seven of the best credit unions with the best car loan rates.
|7 best credit union car loans|
|Credit union||APR range||Loan amounts||Terms (months)||Membership requirements|
|Navy Federal Credit Union||1.79%||100% financing||36–96||Military connection|
|Pentagon Federal Credit Union||1.79%||$500–$100,000||36–84||Valid SSN or TIN|
|Randolph-Brooks Federal Credit Union||1.95%||N/A||24–84||Texas|
|America First Credit Union||1.99%||N/A||36–96||County residents in Arizona, Idaho, Oregon, Nevada, New Mexico, Utah|
|Star One Credit Union||2.29%||100% financing||Up to 84||California|
|Bethpage Federal Credit Union||2.54%||$3,750–$100,000||Up to 96||Valid SSN or TIN|
|Golden 1 Credit Union||2.69%||N/A||N/A||California residents|
How we choose the best credit unions for car loans
We researched the 15 largest credit unions in the U.S. by assets as of July 2021 and chose the top seven. We considered the lowest-offered auto loan APRs, the membership requirements and the range of auto loan terms and amounts you can finance.
Navy Federal offers competitive loan rates for those who meet its membership requirements. To join, you must have a connection to the U.S. military. If you’re eligible, you must open a Navy Federal savings account with a deposit of $5 to become a member.
Members can apply for a loan to purchase a new or used car or refinance an existing loan from another lender. You can get preapproved for a loan and get a check to take to the dealer. Discounts are available for active duty and retired military members with direct deposit. Discounts are available on car insurance, and guaranteed asset protection (GAP) insurance can be added to a new or existing loan.
At PenFed, you’ll find some of the best new car loan rates available on all types of auto loans: new, used and refinancing. You can apply for a loan without being a member, but you will have to join to receive the loan. You can apply for membership and a loan online. As the name implies, PenFed was originally created to serve Department of Defense employees, but it has recently opened its membership to anyone. All you need is a valid Social Security number or taxpayer identification number (TIN). You’ll need to make a $5 minimum deposit, as all members must own a “share” in the credit union to use its services.
Texas-based RBFCU offers new, used and refinance auto loans, as well as financing for RVs, motorcycles, boats (excluding yachts), personal watercraft and ATVs. Rates will vary based on rate and terms as well as your credit rating, collateral value, amount financed and other factors. You may apply without being a member, but you must have an active membership to finalize your loan.
RBFCU serves four major market areas in Texas — Austin, Corpus Christi, Dallas-Fort Worth and San Antonio — with more than 60 branches. Qualifying organizations include employers, places of worship, community organizations, neighborhoods and schools, as well as through immediate family members. You must open a primary savings account with a minimum deposit of $1 to become a member.
America First offers loans on new and used vehicles and refinancing loans from other institutions. Rates vary by the term of the loan. America First offers a rare option, the declining rate loan. In this 60-month loan, your interest rate drops with every on-time payment.
America First membership is available to people who live or work, worship, volunteer or attend school in select counties in Utah, Nevada, Arizona, Oregon, Idaho and New Mexico, or work with affiliated employers or are immediate household members. To become a member, share savings accounts start at $1.
Star One offers loans on new and used vehicles and will finance vehicles less than 10 years old. You can also get a loan for up to 100% of a Tesla for seven years and classic cars up to 80% as well. Loans are also available for RV, boats and motorcycles. The credit union also offers optional major mechanical protection plans, GAP insurance and credit life and disability insurance. You can apply online and get preapproval so you can compare the dealer’s financing offers.
New York-based Bethpage FCU offers competitive loan rates for new and used cars, refinancing and lease buyouts. You can get preapproved with a loan offer good for 60 days so you can compare dealer financing options. Lease buyouts offer fixed rates for up to 84 months for up to 125% of the car’s loan-to-value (LTV) ratio based on the car’s value and the loan amount. Bethpage will finance used cars up to nine model years old and classic vehicles at least 25 years old.
California residents can seek out competitive auto financing at Golden 1 Credit Union, which has more than 1 million members and $17 billion in assets. It offers financing and refinancing on both new and used vehicles, and loans for new and used boats, Jet Skis, RVs and ATVs. You can get preapproved for up to 30 days while you’re shopping for a car, so you can compare rates and select the best deal for you. If you can’t make a payment, Golden 1 members can skip up to two payments for the life of the loan.
Golden1 Credit Union offers membership to everyone who lives or works in California, in addition to the family members and domestic partners of current members; those outside of California are allowed if they are in select employee groups. To become a member, you only have to open a Golden 1 savings account with a $1 deposit.