Best Credit Unions for Car Loans

Credit Union

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Credit unions accounted for $369.8 billion in auto loans in 2017.

These days, it makes great financial sense to consider a credit union when you are shopping around for an auto loan. Whether you're looking to refinance your existing loan to lower your interest rate or monthly payment, or you're shopping loan rates for a new or used vehicle, credit unions can be a great place to look.

A credit union serves as a local, neighborhood financial institution that is designed to serve its members. To get a car loan from a credit union, you need to belong to a credit union in the first place. Most credit unions are centered around a preexisting group or community, such as a college or university, a professional organization, a profession such as teachers, or your employer.

Most people only check the rate they would get from an auto dealer against the rate they can get from their bank, and that's if they do any comparison at all. But not considering all of the options is a sure way to lose out on a tremendous amount of savings that you otherwise could use toward your new car, or put in your pocket.

You might choose to go with financing provided by a car dealership or their captive finance company, because they'll promise you special offers and promotional loan rates, and it doesn't require any visit to a credit union before you start car shopping. However, it's important to run the numbers to see if these dealer loans, with incentives, are truly costing you less than you'll pay with a credit union loan.

Many people would rather skip financing at the dealership so they can walk into a car negotiation with their own financing already in place. To fully understand whether a credit union loan can work for you, it's useful to see how credit union car loans stack up against getting a loan from a bank.

The following table highlights a few of the pros and cons of going with a credit union loan over a bank loan.


  • More personalized customer service

  • Some of the most competitive loan rates and fees


  • May not have as much expertise

  • May not have as much tech savvy or online tools

Pros of Getting a Car Loan Through a Credit Union

  • Customer service: The reason people choose to put their money in a credit union in the first place is that unlike banks, a credit union gives you more personalized attention. Because they are so customer-centric, you will likely have better interactions with a credit union than you’ll have with a bank. Unlike banks, credit unions are not-for-profit organizations, and thus, they have an incentive to help their members rather than to make money.
  • Lower fees and rates: Credit unions typically have lower overhead expenses because they don't need to make a profit, they don't have as many branches, and they don't have expensive advertising campaigns. For these reasons, you might have an easier time getting good loan terms and a lower interest rate over the life of your loan. You'll almost certainly save money on the rate for a credit union car loan over what you'd pay for the same loan at a national bank. You'll likely save even more with your credit union loan than you would if you paid the rates at a regional or local bank.

Cons of Getting a Car Loan Through a Credit Union

  • Less experience: Most national banks have hundreds of locations around the country and have dealt with each aspect of the car loan application and service. Because there have been more people who have gone before you, you might have an easier time getting common questions answered or issues solved.
  • Harder to access: Credit unions are also typically smaller organizations without the same investment in information technology infrastructure as with many large banks. If you want to get a problem solved in the middle of the night or service your own account online, with a bank, it’s more likely that there will be technological solutions in place to solve your issues.

Best Credit Unions For Car Loans

Just like any other loan, the actual rate you will get will depend on your credit score, ideal loan amount, down payment, and the length of the loan. Here are some great options with rates accurate as of 2/28/2020:

Alliant Federal Credit Union

APR: 2.99 percent

Loan Details: Loans are available for up to 84 months, way longer than some others on this list, and there are no prepayment penalties. You can get pre-approved for the loan before you buy so that you can shop with confidence. You can become eligible for this credit union through your employer or select professional organizations. All loans with Alliant are underwritten at the same rate.

Consumers Credit Union

APR: Starting at 3.19 percent

Loan Details: You can secure a loan for up to 84 months, which is much longer than some of the more exclusive credit unions below. Unlike others on this list, Consumers Credit Union is fairly easy to join. It is an Illinois-based company, but they work with individuals all around the country, particularly those who don’t have great credit, are trying to rebuild credit and those who are looking to refinance.

NIH Federal Credit Union

APR: Starting at 1.99 percent

Loan Details: Loans are available for up to 48 months, up to 125 percent of the vehicle’s value. This credit union is a bit exclusive, as it is only open to those in the healthcare or healthcare-adjacent industries who live in Maryland, North Carolina, Virginia, Washington DC, and West Virginia.

Pentagon Federal Credit Union

APR: As low as 1.49 percent

Loan Details: Loans are available for 36-84 months, up to 100 percent of the vehicle’s cost, and start at $500 and go all the way up to $100,000. This credit union is open to members of the military, U.S. government employees, or their supporting organizations. They offer unique options such as a payment saver loan where you pay lower payments and a higher interest rate, then at the end of the loan, you are responsible for paying off the balance either out of pocket, with a refinance, or trading in the vehicle.