In addition to cash, you can buy your dream car by way of credit. Whether through bank credit or through credit unions. With a mild down payment, buying a car on credit is able to attract consumers. Even the purchase of cars on credit has become a trend today. So that more banks or credit financing institutions offer the convenience to apply for new car purchase credits.
However, the choice of financing institutions that make consumers confused in determining the best choice. Especially when applying for the car loan process. As a financing institution, banks and credit unions have the same role, namely providing bailout funds to pay part of the price of the car. Then the consumer pays to the institution in installments every month including interest.
Here are the advantages and disadvantages of a bank or credit union as a financing institution that provides a bailout of your car purchase on credit.
The advantage of applying for a car loan through a bank is a lower interest rate than a credit union. This can be a solution for consumers who want to get a DP and lighter monthly installments. But the submission process until your auto loan is approved is not as easy as in a credit union. In addition to the old process, the completeness of the documents / requirements must be met. Because the bank will be more selective to determine and ensure buyers are able to pay installments and down payment. Including must pass checks to see history of a customer’s credit.
Through Credit Unions
Despite offering higher interest rates from banks, the process of applying for car loans through credit unions is somewhat easier and faster. In addition, there are other costs you should bear such as fiduciary, insurance and provision.
Credit unions generally require consumers to insure their cars. This is to avoid the risk of loss or damage due to an accident. Car loan insurance offered is usually there are two types of All Risk and Total Lost Only. You can choose one of these insurance products. Of course that can suit your needs and finances.