Updated: Mar 5, 2022
This week’s topic is about credit unions and refinancing.
Many people handle their money with major banks; however, credit unions can offer many advantages that banks do not.
One is they may offer a more personalized customer service, lower fees and higher interest rates on savings.
Another benefit is competitive interest rates on consumer loans.
Recently, I was working with a client that bought out her lease and set up a $20,000 loan at 5% interest for a 60-month term.
This equates to a $377 payment and the total interest over the loan term will be $2,600.
So the next move was to reach out to the credit union which offered her a highly competitive rate of 1.98%
With the refinance, the loan payment was reduced by $27 to $350 and the total interest was lowered by $1,577.
So this is fantastic!
Now this created options - she can take the savings and throw it into the loan and it will be paid off four months earlier.
If she has credit card debt she apply that extra savings to pay off that toxic debt.
So here’s the bottom line: consider using a credit union with some of your financial decisions especially for auto loans as there should be no little-no-fees to set up the loan.
In this scenario it was a very painless way to save $27 on the budget.