thanks for the help guys. you guys recommend to join a cu, right? i've heard of a credit union before but i don't actually know what they are. can someone explain?
Credit unions, around since 1935, are not-for-profit cooperative financial institutions created by people with a common affiliation, such as belonging to a labor union, an association, or even working or living in the same place. Members deposit money into — and save money in — credit unions. The money is then returned to the members in the form of loans at better rates than most banks. In addition, you can save on bank fees.
Initially, credit unions were designed to benefit people who were not being served by banks, such as those who were not approved for bank loans. Today, however, credit unions have become widespread. There are nearly 10,000 credit unions in the United States with combined assets of more than $500 billion. They are able to beat banks in nearly all categories of loan interest rates because they're nonprofit, and as a result, don't have to pay taxes.
While the competition doesn’t please the banking world, there are additional benefits to using a credit union, including:
1. Nonprofit status. For-profit banks and other lending institutions are looking for a return on an investment when a member takes out a loan. Credit unions, however, have no stockholders looking at the return on their investment.
2. Democratic process. The board of directors is elected by the union's membership, and works on a volunteer basis. Unlike banks, credit union members have a direct say in who's elected to run the credit union.
3. Inclusiveness. Credit unions have long-standing reputations for allowing spouses, siblings, and children of members to join.
4. Lower fees. Comparatively, credit unions have lower fees for services than banks.
5. Better interest rates on loans. Interest rates are typically better through credit unions, which traditionally have been among the leaders in auto loans.
6. Funds returned to members. If there are excess funds, they are generally returned to the members in the form of dividends.
7. Credit unions are generally easy to join. You need only ask your employer, family members, or neighbors about credit unions that they may be part of. The process is then fairly simple, and minimum balances are usually very low.
One thing you should keep in mind is how convenient the credit union is to your home or office. Since credit unions typically do not have as many branches as banks, you should look for one that's nearby. As credit unions merge and grow (some have assets in the billions of dollars), it's becoming much easier to find convenient branches.
The Credit Union National Association, www.cuna.org, can help you locate a credit union in your area