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

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!

Auto Finance Tips - Refinancing Your Car Loan
By Philip Reed, Senior Consumer Advice Editor

As interest rates drop, people's thoughts turn to refinancing - refinancing their home loan, that is. What they don't know is that refinancing an auto loan is easier to do, and it can save you some serious money.

How much? Say you bought a new car six months ago. And say there were a few dings on your credit so the dealer told you that your auto loan would be 11 percent on a five-year loan for a $23,000 car. Your monthly payments are $500.

Now let's say that you surf the Web until you find a company that offers auto refinancing. You could refinance the balance of your car loan and lower your payments to about $400 a month. That's a savings of nearly $6,000 over the life of the loan.

Other examples could well be more dramatic. In some cases, a new-car buyer could wind up with an auto loan based on an 18-percent interest rate. By refinancing at a competitive rate, the monthly payments would be slashed, and all it takes is about 10 minutes to fill out the application.

CU Efficiencies Drive Dividends
By Marygrace Murphy, Credit Union Times

Credit unions often differentiate themselves from banks by offering year-end bonus dividends to members. A number of credit unions are finding ways to operate more efficiently so that members can enjoy their portion of excess earnings this year.

Midland, MI-based Dow Chemical Employees' Credit Union returned $9 million in year-end rebates and rewards to members who used the credit union to borrow or save money in 2008. On the other hand, Las Vegas-based Clark County Credit Union is not expecting to offer a bonus dividend at the end of this year.

This news comes in marked contrast to CCCU's January announcement of a $2.9 million dividend for 2008, the ninth year in a row it had distributed such a dividend.

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 money market 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 money market can set their own loan requirements.