Loans: Credit Union Vs. Bank
Loans are a way of life for most Americans. Whether for a car, a mortgage or a home remodel, chances are you'll be shopping for a loan at some point. It can be overwhelming. However, knowing the differences between a bank and a credit union can help you make the right decision. Credit unions operate under different laws than banks and generally offer better rates on loans.
Other People Are Reading
-
Auto Loans
-
Auto rates tend to be lower at credit unions. According to DataTrac, the average interest rate in 2010 for a new car loan financed for 48 months was 4.55 percent at credit unions nationwide. That's more than a point lower than the average bank loan, which was 5.81 percent. Credit unions often have extras like free credit-life insurance and lower fees.
Mortgage Loans
-
Credit union mortgage rates are about even with bank loans. The average interest rate for a 30-year fixed mortgage from a credit union in 2010, according to DataTrac, was 4.68 percent, as compared to 4.69 percent from banks, making credit unions and banks on par in the mortgage market. When loan shopping, compare fees as well as rates.
-
Credit Cards
-
Bank-issued credit cards are known as having high rates and fees. Credit cards tend to have lower rates and fewer fees at credit unions as well. The average rate for a classic card from a credit union in 2010 was 11.69 percent. The bank rate was 12.3 percent.
Other Loans
-
The rates on home equity lines of credit, home equity loans and unsecured loans were all significantly lower at credit unions than banks in the DataTrac study. The only way to ensure that you are getting the best deal is to compare rates in your city.
-
References
- Photo Credit bank notes image by Alison Bowden from Fotolia.com black car on the street image by Furan from Fotolia.com new home image by Greg Pickens from Fotolia.com Credit card globe image by patrimonio designs from Fotolia.com
