If you have found yourself in a situation where you need to purchase a car but have a poor credit score, it can feel like your opportunities are limited. But poor credit auto loans could be a good solution for you. Still, if you get this type of financing from a bank, they could be more interested in turning a profit than catering to your needs. Alternatively, if you get financing from a dealership, you could be stuck with outrageous rates and fees. Luckily, when you partner with a credit union, you can rest assured that this institution will not simply dismiss you as a two-dimensional, high-risk customer and will try to understand your situation.
At Camino Federal Credit Union, we have served Montebello with financial products tailored to each member’s needs since 1941. We believe your past doesn’t define you, so we partner with each member to help them achieve financial success, whatever that looks like for you. Learn why credit unions outshine banks for these financial products.
Challenges of Poor Credit Auto Loans
Poor credit auto loans are a type of financing for borrowers with lower credit scores, usually 580 and lower (FICO’s definition of bad credit). These loans work essentially like any other car loan. You repay them in monthly installments over a predetermined period.
When you apply for an auto loan with poor credit, there are challenges worth anticipating. These loans typically come with a higher interest rate because creditors see lower scores as a sign of greater risk to their institution.
Generally, you will experience higher borrowing costs with these loans. When reviewing your application, lenders will assess your income, current debt, and the make, model, age, and condition of the vehicle you want to purchase. These factors determine your rate and how much you can borrow.
A low credit score could also reduce the amount you can borrow, and approval, in general, is more of a challenge. Luckily, with a credit union like Camino, you partner with a financial institution committed to helping your finances shine.
Why Credit Unions Shine for Poor Credit Auto Loans
Credit unions are excellent options for borrowers looking for car loans with poor credit for several reasons. From member-focused services to competitive rates and flexible terms, here’s what could make credit unions a great option for financing a vehicle with poor credit.
Member-Focused Services
Credit unions are not-for-profit, so their top priority is providing the best possible service to members. In fact, when you join a credit union, you become a part owner, which could be invaluable when securing an auto loan with poor credit.
Because of this dynamic, credit unions could offer lower interest rates and more favorable terms on financial products, which can help save you money. In doing so, you can save up for a larger down payment to facilitate approval for the loan amount and vehicle you want!
Member-focused services also mean you will work with local member advisors who have a deep knowledge of the area. They will take the time to understand your situation and goals, and they can even make recommendations as to where you can purchase cars in the area within your price range.
Second Chances and Credit Building Opportunities
Another advantage of pursuing financing through a credit union for these loans is that your unique story is more likely to be heard.
If you hit a rough patch, need more time to make a payment, or are interested in second-chance auto loans, you can have a conversation with an attentive and understanding member advisor.
Competitive Rates and Flexible Terms
As we mentioned, because you are a part owner of a credit union, credit unions cater to you and your needs. You could receive more competitive rates than other financial institutions, especially dealerships.
Many dealerships advertise financing without running a credit check. We strongly advise against this type of financing. These types of loans usually carry sky-high rates, stacked fees, and, in some cases, equip your car with a GPS to ease repossession.
When you pursue financing through an institution like Camino, you receive competitive interest rates and flexible terms tailored to your situation. As a result, you could receive a more affordable monthly payment with a longer term if it makes more sense to you.
Other Benefits of Poor Credit Auto Loans from Credit Unions
Credit unions offer several other benefits to members interested in poor credit auto loans. These benefits include:
- A user-friendly loan application process you can complete from the comfort of your home or even on your phone.
- Pre-approval so you know what kind of loan you will be eligible to receive.
- Personalized, local support
Do You Want to Rebuild Your Credit and Drive in Confidence? Contact Us Today to Learn About Our Poor Credit Auto Loans.
Has your credit score seen better days? That doesn’t mean you have no financing options available! At Camino, we believe life should be full of fresh starts and second chances. When you partner with a credit union that offers poor credit auto loans, you can rest assured that you could receive the best rates available, flexible terms, attentive service, and local decision-making.
If you are ready to put yourself back on track to a bright financial future, then visit our Second Chance Auto Loan page to see our car loan options for members with less-than-stellar credit.