Quote:
Originally Posted by Elke Mariotti
Often credit unions have better rates for auto loans, especially if you're a current customer.
Have you checked with your current financing company? I've had good rates from them when buying out my lease - much depends on your credit.
|
be careful with any thing you get from a credit union ..unlike most banks , credit union loans and credit cards have a hidden gotcha few realize .
the cross collateralization used by many credit unions can be quite a shocker to those who don't read or understand the differences between a bank and a credit union.
When you take out a loan to buy a large item, such as a car, you give the lender a security interest in the item. This means that if you don't make your loan payments, the lender can take the item and sell it to satisfy the debt.
When you borrow money from a credit union to buy something, the loan agreement usually contains a clause that says that not only is the property collateral for the loan you're obtaining to buy it, but it will also be collateral for any other loans you take out through the credit union. That includes credit cards and personal loans.
you buy a car by taking out a loan from your credit union. The loan agreement for your car loan contains a cross-collateralization clause. you later open a credit card account with that credit union and uses it to pay for some vacations.
After three years, you pay off your car loan, but you still have a balance due on your credit card.
you lose your job and stop making your credit card payments. The credit union can repossess your car and sell it to pay the credit card debt.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
