5 Reasons Credit Unions Offer the Best Auto Loans

The average cost of a new vehicle today is around $30,000.

The purchase of a car likely will be the second largest expenditure you have, second only to the purchase of a home. Whether you desire the shiny, brand new one, or if you are content with finding a reliable used one, we want to help you to get the most for your money.

Here are five reasons it makes more sense to get your loan through a Credit Union.

1. With Credit Unions, you have a better chance of getting your loan approved. Even though the loan application process is the same and the underwriting process is similar, the credit union may make some adjustments that a commercial bank would not. Many credit unions are also more inclined to listen to its members’ needs and unique situations—sometimes adjusting terms of a loan accordingly.

2. Lower rates. A five-year term is the most common loan term for a new or used car, and rates at a credit union are typically much lower than the average rate at a competitor bank. The savings in interest alone is a major reason to consider this financing. Just think of what you can do with that money.

3. Personalized service. Because they are are non-profit organizations and work to provide members with high-quality customer service, operations decisions are made by a group of volunteer board members rather than a corporate office. You can openly discuss your concerns about your loan, talk about flexible repayment options and review your financial situation with a dedicated professional. This can alleviate some of the pressure of applying and securing financing for your new or used vehicle and you can be more confident that the credit union is working with your best interests in mind.

4. Educational resources. Many credit unions will provide information such as financing options and how to make the best decisions when assessing the value of your car purchase. If you’re a first-time car buyer and apprehensive about the loan process, you can turn to a credit union for unbiased answers.

5.A non-sales approach. Unlike commercial banks, which often grant their lenders bonuses or some type of compensation for the loans they get approved, credit unions, as not-for-profit financial institutions, work for their members and aren’t driven to sell you anything that equates to extra money in their pocket.

All profits from members end up going back to them in the form of lower rates on financial products and more flexible loan options. If you don’t like the pressure of working with lenders from a commercial bank, a credit union is the answer.

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Celebrate International Credit Union Day: The Authentic Difference

For more than 160 years, credit unions have put people before profit.

In the 1850s, hard times hit Germany, and people turned to each other for help. They removed small savings from under mattresses and started making reasonably priced loans to one another. These early credit unions were the model for all the credit unions that followed: not-for-profit, democratically controlled and community oriented. The principles that guided them then, guide credit unions today.

In the 1920s, Edward Filene took cooperative finance to the next level in Boston, as a means of lifting working people out of debt and creating a better life. On January 17, 1927, the Credit Union League of Massachusetts celebrated the first official credit union holiday. January 17th is the birthday of Benjamin Franklin, America’s “Apostle of Thrift,” who credit union founders believed to symbolize the purpose and spirit of credit unions.

During this time, the U.S. credit union movement was new and spreading. In response to the Great Depression, new credit unions were being formed to fill the void left by shuttered banks.

The U.S. Credit Union National Association (CUNA) and CUNA Mutual Insurance Society initiated a new national Credit Union Day celebration in 1948. The third Thursday of October was set aside as the national day of observance. This occasion brought members together to promote the credit union philosophy nationally and reflect upon credit union achievements and history. Members raised funds for the movement and paid homage to loyal supporters and pioneers.

The World Council of Credit Unions, established in 1971, assists credit union movements and supports their development around the world. World Council observed the first International Credit Union (ICU) Day more than 30 years ago, and continues to endorse global celebrations. The credit union movement has grown to more than 217million members in 101 countries. Celebrate the credit union difference during this year’s ICU Day – October 20, 2016.

Copyright 2016 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.

 

How Much 20-Somethings Should Save

Your 20s may seem like an odd time to think of retirement, but it’s actually the perfect moment to start planning for your later years. That’s because the earlier you start saving, the more time your money has to grow.

Savers who begin setting aside 10% of their earnings at 25, for example, could amass significantly more by retirement age than those who wait just five years to start saving. You can use online calculators to see how much starting saving now can produce once you reach retirement.

Building a nest egg on a starter salary and a shoestring budget can seem daunting, though. Focusing on the incremental savings, rather than the goal, can help your savings objectives feel more manageable.

How much to save for retirement

For those earning around $25,000 a year, the median income for 20 to 24 year olds in 2015, saving the recommended sum of 10% amounts to a little more than $200 a month.

It may seem like a reach, but consider this: If you start saving $100 a month at age 25 and invest it to return 7.7% a year — the average total return of the Standard & Poor’s 500 Index of U.S. stocks over the past decade — you’ll have more than $378,000 available at retirement age. And it could be tax-free.

If you wait until you’re 30  to start and save the same monthly amount at the same rate of return, you’ll wind up with less than $253,000.

Several vehicles can help you build a retirement fund. A 401(k) contributory plan, typically offered by your employer, is often the most convenient and easily accessible of these. Contributions you make usually aren’t taxed, which helps reduce your income tax liability.

Pre-tax 401(k) accounts make up around 80% of retirement plans offered by employers, according to the American Benefits Council. Roth 401(k) accounts are another option, though these are less widely available, and money contributed to a Roth 401(k) account goes in after it’s taxed. Money withdrawn from this type of account — including earnings — is usually tax-free.

Companies that offer a 401(k) plan often match employee contributions, up to a certain percentage. This is essentially free money toward your retirement.

If your employer will match your contributions, try to take full advantage and commit a large enough percentage to get the full benefit.

Beyond a 401(k), individual retirement accounts, commonly referred to as IRAs, offer another solid option. There are two types: traditional and Roth.

Money put into a traditional account is tax-deferred, similar to funds put in a traditional 401(k) plan. That means those funds aren’t taxed until they’re taken out. But typically any earnings you make with the money are also subject to income taxes on withdrawal.

Money put into a Roth IRA has already been taxed when you earn it, so there’s no immediate tax benefit. When it’s time to withdraw the cash, however, you usually don’t pay taxes on it. And anything the money earns also can be taken out tax-free.

Contributions to both types of IRAs are currently capped at $5,500 a year for those under age 50, and $6,500 for older workers.

How much to save for emergencies

In addition to retirement, it’s also wise to save for a rainy day. Ideally, your emergency fund should be enough to cover three to six months of living expenses.

Some experts suggest setting aside even more for savings and investments: 20%. That’s roughly $415 a month on an annual income of $25,000.

That’s not always feasible, especially if a big chunk of your monthly income goes to student loan and credit card payments. Consider saving what you can, even if it’s just $10 a month.

Making a habit of saving now could serve you well down the road. And, as your income increases, the percentage you save can as well.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

Utilizing Digital File Keeping

Most everyone has too many digital files to count these days. Music, pictures, financial files, product warranties, even retail receipts that are e-mailed rather than printed at the cash register leave us with digitized pieces of our everyday life.

Sixty-eight percent of Ohioans organize their important documents digitally, according to a 2016 Mid-Year Consumer Survey, conducted by the Ohio Credit Union League. When it comes to their personal bookkeeping, 27 percent said they receive all their monthly account statements digitally via e-mail, 52 percent said they receive at least some of their monthly statements digitally, and 21 percent said they still prefer to receive hard copies of all statements.

Even while people utilize digitization for their personal accounting and filing systems, almost 57 percent of the survey’s respondents said they’re not entirely sure their personal information is safe. Less than 32 percent said they have complete faith that their files are safely stored.

A 2015 international survey conducted by Accenture Consulting noted that while consumers find smart devices, and the files stored on them, to be increasingly relevant to their lives, they are not convinced there is a satisfactory level of security and privacy.

While less paperwork to pile, file, or shred is a bonus, digital consumers still want to feel like their personal information is safe. Here are a few helpful tips for staying organized and keeping digital data safe.

• Take control of your computer. Perhaps the most important step in digital organization is taking control of your computer. File important e-statements in labeled folders in your “My Documents” folder. It reduces desktop clutter, adds a level of security if your system crashes, and makes searching easier should you need to find a document.
• Set a rule for creating passwords. You don’t need to remember 75 passwords if you have one rule set for generating them. For instance, try always using your initials to start, followed by a favorite number, then the first two to three letters of the service name. Using the same password repeatedly makes it easier for identity thieves to hack into your accounts. And creating multiple passwords with no rule makes it difficult to remember them all.
• Archive files. Archive what you don’t want or need. Create a folder in your “My Documents” folder called “Archives.” You can place items there you don’t necessarily need, but aren’t comfortable deleting right away.
• Keep a paper trail. Keep a digital and a safely-stored paper version of critical documents that are either hard to replace, such as family health records and major home improvements, or for documents that are tax or business related.

To learn about credit unions in your community and how they can provide digital documents for your financial needs, visit www.aSmarterChoice.org.