Search and compare credit union car loans

Credit unions are member-owned financial institutions. When you take out a loan with a credit union, you must first become a member, which also means becoming a part-owner. Credit unions work for their members, using profits to provide them with competitive rates, low fees and other benefits. This differs to the way banks operate in that they are generally owned by shareholders, and they use their profits to pay dividends to those shareholders.

Like banks, credit unions are registered with the Australian Prudential Regulation Authority (APRA) as authorised deposit-taking institutions (ADIs). ADIs are financial institutions licensed to carry on banking business, including accepting deposits from the public.

The services and products provided by credit unions are much the same as banks, including savings accounts, personal loans, home loans, credit cards and term deposits.

While you might think it’s more convenient or less of a risk to choose a car loan that’s offered by a bank like the big four (CommBank, Westpac, ANZ, NAB), it could be worth considering what credit unions have to offer.

Car loans provided by credit unions can often be some of the more competitive loans on the market, as their profits are used to benefit their members in this way. Credit unions also have a reputation for providing a more personal customer experience than banks, which largely comes from their history as community-based institutions.

Credit unions are also considered to be just as safe as major banks, as they are registered as ADIs and in turn are regulated in the same way.

How do I compare credit union car loans?

Credit union car loans can generally be compared in much the same way as any loan. There are certain attributes that might be worth considering, including the following:

• Interest rates: Take note of both the advertised rate and the comparison rate.
• Any fees involved: This could include application fees, monthly/ongoing fees and sometimes others.
• Fixed or variable: Fixed rate loans will have regular repayment amounts throughout the life of the loan, while variable rate loans may see repayments increase or decrease.
• Secured or unsecured: If you are buying a new or near-new car, you could secure the loan on your vehicle and potentially access a more competitive rate.
• Loan term: Some lenders will offer different loan terms to others.
• Extra features: These include redraw facilities, extra repayments and pre-approval.
• Lender: Comparing lenders’ reputations and offerings might provide you with a more comprehensive understanding of what you could expect from your car loan.

RateCity’s car loan calculator may also assist with your comparison by providing an estimate of how much your repayments might be when comparing different features.

Credit union car loans can differ between lenders when it comes to what they offer, but here are some of the potential benefits and drawbacks to consider:

Possible advantages:

• Fewer fees in general, or in some instances no fees
• More competitive interest rates
• Arguably better customer service

Potential disadvantages:

• Smaller range of products
• Fewer branches
• Fewer online services