Low interest rates at your local credit union

When I bought my car two years ago I checked out Lending Tree and eLoan to get financing and finally settled on a 6.95% loan, which was lower than what my bank offered. I didn’t even entertain the notion of getting financing at the dealership. Today, the rates seem to be a full percentage point higher, probably due to the general skittishness of the banks around credit.

There is an alternative to banks, however. I was generally aware of credit unions and the fact that they often provide lower rates on loans and higher rates on savings, but I hadn’t really bothered to look into the difference until recently. My personal financial situation is much the same as it was two years ago, but with the house of cards collapsing around us, I’ve been doing a little more due diligence on ways to optimize things. After refinancing the mortgage and switching over to the American Express TrueEarnings card, I looked into refinancing auto loans.

USC Credit Union is offering fantastic rates on auto loans. How fantastic? Greater than three percentage points lower fantastic! Specifically, they’re advertising 36 Months at 4.74%, 48 Months at 4.99%, and 60 Months at 5.24%. You could get a loan to buy a new car, a used car, or simply refinance your existing loan.

As with most credit unions, the membership is limited to a select group of people, but chances are, that select group could include you. Membership in USCCU is open to the usual suspects: students, alumni, faculty, staff, and employees of the University of Southern California; but it’s also open to anyone who lives in the City of LA. That’s 3.8 million people! They’ve also extended USCCU membership eligibility to people with ties to certain institutions. If you meet the qualifications, all you need is $11 to open an account and become a member, after which you can apply for some of these great rates.

Obviously, not everyone who comes across this blog is going to have the privilege/burden of living in El Pueblo de Nuestra Señora la Reina de los Ángeles del Río de Porciúncula, but credit unions are everywhere, and if you take the time to investigate the ones near you, you might find some similar deals. The National Credit Union Administration* has a Credit Union search feature you can use to find and evaluate credit unions in your town.

* Think of NCUA as the FDIC of credit unions, with similar deposit insurance guarantees. From their website: “The original intent of Congress to create a system of not-for-profit cooperatives that promote thrift and thwart usury today serves nearly 82 million members with deposits exceeding $520 billion and loans over $355 billion in more than 9,500 federally insured credit unions.”