Save Big Money on Home and Car Loans - Go to Credit Union for Auto Financing
By Elisabeth Leamy, ABC News Consumer Correspondent
This week I shot another one of my savings makeovers based on the strategies in my book SAVE BIG. For this makeover, I worked with the McGraw Hill Federal Credit Union to help a New Jersey family save big money on their home loan and their car loan. I was once again reminded what phenomenal resources credit unions are. In fact, if you are in the market for a car, you have GOT to find a way to join a credit union, if you're not already a member. You can find one you are eligible for at www.findacreditunion.com.
Credit union auto financing is generally such a great deal that I'm going to issue a rule here: never shop for a used car at a dealership without first getting outside financing quotes, especially from a credit union. The loan is one more factor the dealership can play around with in the messy math equation of buying a car. The process is torturous enough. Don't add to the angst.
When I checked car loan rates at a credit union and some other non-dealer sources, here's what I found: Car Loan Interest Rates from Different Sources:
My credit union: 4.25% A small bank in my area: 7% Online Quote: 9.14% Bank where I have my checking account: 11.22%
As you can see, by shopping around for an auto loan, I found a low interest rate of 4.25 percent at the credit union, almost a third the size of the highest quote of 11.22 percent. Now let's see how that helps us SAVE BIG on a $25,000 car loan, the national average.
24-month, $25,000 Auto Loan: The rate at the Bank was 11.22%. The amount owed? $28,032. But at the credit union at a rate of 4.25% the amount owed is $26,112. BIG SAVINGS= $1,920
There you have it. Close to $2,000 in savings achieved through half an hour's worth of work comparing interest rates. I love it when such a small effort yields such BIG SAVINGS!
IMPORTANT INFORMATION ABOUT STUDENT LOANS!
With the recently enacted Health Care and Education Affordability Reconciliation Act of 2010 (HR 4872), the Federal Family Educational Loan (FFEL) Program has been eliminated. Private lenders, such as Southcoast Health System Federal Credit Union, no longer have a role in originating or funding federal Stafford, PLUS, or Consolidation loans.
Please review below guidelines and helpful information:
● Student Loan Guide 2010-2011
● Student Loan F.A.Q.
If you have any questions please do not hesitate to CONTACT US.
$250,000 NCUA Share Insurance Protection Now Permanent!
President Barack Obama yesterday signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act. Included in this sweeping legislation are provisions making permanent the current $250,000 maximum federal deposit insurance level.
Complete NCUA media release document can be found HERE.
When Lender Says NO, Turn To CUs!
By States News Service, Boston Globe
The following information was released by the Credit Union National Association - CUNA:
Credit unions are a good alternative to traditional mortgage financing as credit markets overall have tightened up, the Boston Globe said in a Tuesday article.
Credit unions were listed as the No. 1 alternative of five options mentioned by the newspaper. "Unlike banks and mortgage companies that sell their loans on the secondary market, many credit unions actually keep the loans they make in their own portfolio," the article said.
"The secondary tiered savings purchases bundles of loans from lenders. These loans must meet specific guidelines such as those set by [the Federal Housing Administration], Freddie Mac and/or Fannie Mae.
Once the primary lender sells the loan, the lender is now in the position to make another loan to a new borrower," the article said. Credit unions that don't sell the loan on the secondary tiered savings can set their own loan requirements.