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How Do Auto Loans Work From Credit Unions?

Learn more about the process of borrowing money for an auto loan through your local credit union

When you get an auto loan, you have many choices regarding a lender. If you are considering a credit union to finance your new car you might be wondering, how do auto loans work from credit unions? Keep reading to learn why so many consumers choose to get an auto loan from their local credit union!

What’s The Difference Between Banks & Credit Unions?

Banks and credit unions are both financial institutions you can use to manage your day to day finances, get loans, secure credit cards, and more. Despite the popularity of both options, there is still some confusion about the difference between the two.

Banks are for-profit institutions, while credit unions are not-for-profit. This distinction allows credit unions to offer lower interest rates on loans, while banks typically have higher interest rates. Securing a better deal when you borrow money from a credit union is one of the significant benefits.

Credit unions also tend to provide better customer service. This is due to the structure of credit unions that allows ownership from who they serve: the members. Credit unions are usually smaller than traditional banks, so they can connect with their members in a more personal manner. This is especially beneficial when you have credit issues that require a unique understanding when you’re trying to qualify for the financial services you need.

What's the Process For Auto Loans Through Credit Unions?

Getting an auto loan is a streamlined process that is handled quickly and easily! There are generally four steps when you get your auto loan from a credit union:

1. Apply For A Loan

You have multiple options when you apply for a credit union auto loan, being either applying online or in person at a branch.

Completing your application online allows you to do so from the convenience of wherever you are, but doing so in person can be beneficial if you have any questions along the way or want personal attention throughout the process.

When you get a loan pre-approval before you go to the dealership, you start the process with more negotiation power because you're not seeking funding through the dealership. Also, you can guarantee that you walk in with the best rate as opposed to settling for what they have to offer.

Some credit unions, like Listerhill, also partner with dealerships to provide financing so you can select your vehicle and complete the auto financing process at once. This is a convenient option that allows you to take advantage of the credit union benefits when you purchase your car.

2. Provide Proof Of Insurance

You and your lender will have a similar interest in protecting your vehicle. You may need to provide proof that you have full-coverage comprehensive and collision insurance to purchase your vehicle.

Be prepared to provide your insurance agency’s name, phone number, and address along with your policy number and your agent’s name if you work with a specific person for your insurance coverage.

3. Show Proof Of Income

Your lender is going to want to make sure you can repay the loan. Therefore, if you are an employee at a company, you will need to provide copies of your pay stubs within the last month. If you are self-employed, you will need to show copies of your tax returns from the past two years.

Finally, if you are reporting income from other sources such as child support, alimony, or rental income, having documentation can help you qualify for more money.

4. Finalize Your Loan

After all required information and documentation are received, a credit union representative will contact you to discuss finalizing your loan. It's at this time that you will be told how much you qualify for, your interest rate, and other related terms.

You will then need to sign a loan agreement which details all of the information related to your loan. Be sure to read your agreement thoroughly when you finalize your auto loan.

Experience The Credit Union Difference

There's a reason why so many people turn to their local credit union to secure auto financing. With excellent customer service and low auto loan rates, you can't go wrong!

At Listerhill, we love helping you secure auto financing so you can get the vehicle of your dreams. When you're ready to experience the credit union difference, we're prepared to help you get the funds you need.

Learn more about getting an auto loan through Listerhill in these related articles:

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Frequently Asked Questions

  • How am I eligible for membership at Listerhill if I don't live near a branch?

    You can become eligible for membership at Listerhill anywhere in Alabama if you join the Alabama Consumer Council or the Athens State Alumni Association. In Tennessee, you can also become eligible for membership if you join the Athens State Alumni Association. This membership is initiated at no cost to you and doesn't require any setup on your part outside of the normal application process to become a member of Listerhill.

  • How can I access my Listerhill accounts without a nearby branch?

    If you live in Alabama or in Tennessee but don't have a Listerhill branch location nearby, there are still plenty of ways to access your accounts. You can use our online banking, mobile banking app, and cards app to access your accounts from your devices. You can also take advantage of our CO-OP Shared Branches for easy access to your money wherever you are. If you need to get in touch, we're always one call away.

  • Can I open a Listerhill account online?

    You can open your Listerhill account, loan, or credit card from the comfort of your home with our easy online application. Or, if you want to apply for a mortgage, you can learn more about our offerings and start your application here.

  • Am I eligible for membership at Listerhill?

    If you live, work, attend school, or own property anywhere in Alabama or Tennessee, you're in luck! You're eligible to become a Listerhill member.

  • The Great Giveback Official Rules

    1. Eligibility: No purchase or obligation necessary to participate and win. All participants must be 19 years of age or older at time of contest participation. Employees of Listerhill Credit Union are not eligible to register for the contest.

    2. How To Enter the Contest: All Listerhill members who have consumer loans in good standing, (subject to limitations below) are automatically entered. Anyone who takes out a new loan with Listerhill Credit Union, or refinances a loan from another lender with Listerhill Credit Union (subject to limitations below) will automatically be entered to win. Limit of one entry per loan.

    NO PURCHASE NECESSARY: To enter the contest without a loan, send a self-addressed, stamped envelope to: Listerhill Credit Union, P.O. Box 566, Sheffield, AL 35660, Attn: Great Giveback Contest Entry. Limit one entry per person. Written entries must be received no later than July 3, 2021.

    Listerhill Credit Union will not be responsible for incomplete, lost, late, misdirected or illegible entries or for failure to receive entries. All entries become property of Listerhill Credit Union and none will be returned. Any questions regarding the number of entries submitted shall be determined by Listerhill Credit Union in its sole discretion, and Listerhill Credit Union reserves the right to disqualify any entries by persons determined to be tampering with, violating, or abusing any aspect of the contest.

    3. Contest Entry Requirements: In the event the Credit Union, in its sole discretion, determines that any Entry contains content that does not comply with these Official Rules or does not otherwise comply with regulatory guidelines, Credit Union reserves the right to disqualify the entry.

    4. Determining the Winner: A Credit Union employee will select at random four (4) $500 winners (one per day July 12-15) and one Grand Prize Winner from all entries received on July 16, 2021. You do not have to be present to win.

    5. Prizes: $500 Cash Prize: the Credit Union will award four (4) members with $500 cash each. Grand Prize: The Credit Union will pay up to $25,000 toward your loan with Listerhill Credit Union, or combination of loans. No loan payments will be made to loans with any other lender. No cash equivalent provided, and the total prize amount may be less depending on the outstanding amount of loan balance(s) with Listerhill Credit Union. In no event will the prize awarded exceed the total amount of the winner’s outstanding balance of qualifying loans with Listerhill Credit Union. Federal, state and local taxes are the sole responsibility of the winner. IRS regulations require the Credit Union file a 1099 on behalf of the winner.

    A Credit Union employee will call the prize winners and the prize winners will be called up to five times during regular business hours at number provided on entry form and will leave no messages. Failure to reach winner during these calls may result in disqualification of winner, forfeiture of his or her interest in all prizes, and selection of a substitute winner drawn from the drum. Winner will be required to schedule a time, at least 48 hours in advance, to visit Listerhill Credit Union, located at 4790 2nd Street, Muscle Shoals AL, 35661 in person, during regular business hours within seven (7) days of being notified to claim prizes by providing proof of eligibility for prize won and completing and signing an affidavit of eligibility and a liability and publicity release. Failure of any Winner to timely contact the Credit Union, visit the above Credit Union office in person and sign and return any required affidavit and release, or to claim a prize or comply with any term or condition of these Official Rules, will result in drawing Winner's disqualification and the forfeiture of his or her interest in the prize. Winners may waive their right to receive prizes. Prizes are non-assignable and nontransferable. No substitutions allowed by winner.

    6. To be eligible to win, all loans must be in good standing (not more than 30 days past due at the time of drawing. Eligible loans are limited to auto loans (no indirect dealer loans), personal loans (no loans secured by real property, such as mortgages, 2nd mortgages, and Home Equity Lines of Credit) and recreation loans made to consumer borrowers (not business or commercial loans).

    6. Participation. By participating, entrants agree to be bound by these Official Rules and the decisions of the Contest. Except where prohibited, acceptance of any prize constitutes winner's consent to the publication of his or her name, biographical information and likeness in any media for any commercial or promotional purpose, without limitation the Internet, or further compensation. Prizes not won and claimed by eligible winners in accordance with these Official Rules will not be awarded and will remain the property of the Credit Union.