You’re getting ready to buy a car and, unless you have money to spare, you probably plan to apply for an automobile loan, so you can pay for your car in installments.
At Addition Financial, we spend a lot of time with our members (and prospective members) walking them through the car-buying process. One of the most common questions we hear has to do with credit union car loans. People want to know what the requirements are to get a loan with us and if they differ from the requirements for a traditional bank loan.
With that in mind, let’s walk through the requirements for a credit union car loan so you’ll know what to expect.
Credit unions don't have customers – they have members instead who are also owners of the financial institution just by having a savings account. It's the primary way credit unions differ from traditional banks and lending institutions. If you want to get a credit union automobile loan, you must first become a member of the credit union.
To join a credit union, you have to qualify for membership. For many credit unions, members qualify by living within a specific geographic location such as a state or county. Some credit unions are only for people who have served in the military; others are available based on the company you work for.
Our Addition Financial membership requirements are simple:
Anybody who lives, works, worships, attends school or volunteers in Orange, Osceola, Seminole or Lake County can become a member. If you join, your immediate family members may join too, including your parents, children, grandparents, spouse, siblings and stepparents.
You will need to pay a membership fee to join. At Addition Financial, the fee is just $10. You'll also need to maintain a minimum balance of $5 in your share account. Once you’re a member, you’ll have access to our versatile car loan options and other benefits.
The next requirement has to do with your credit score. In some ways, credit unions can be more flexible than banks with credit scores and loan requirements. However, our commitment to our members is that we will invest their money wisely.
Your credit needs to be in good shape to get a credit union car loan. Ideally, you should have:
That said, you don’t need a perfect credit score. We work with our members and we understand your credit score may have taken a hit for one of many reasons that has nothing to do with your sense of responsibility and commitment to paying your debts.
When it comes to the paperwork and documentation you'll need to submit, the requirements for a credit union car loan are identical to the requirements for a traditional bank loan. You will need to fill out an application and provide additional documentation as requested.
Here are the basics of what you will need to provide:
You should also be prepared to answer questions and provide additional information if there are any red flags or issues on your credit report. Remember, the underwriting process is designed to determine your creditworthiness.
At a credit union, the underwriting department has two main concerns. The first is to provide the best possible loan rates to its members. The second is to protect the members since they are the ones who own the credit union.
While the requirements for getting a credit union car loan are similar to those for bank loans, there are some real advantages to getting your car loan through a credit union.
In other words, joining a credit union to get a car loan makes sense. You are likely to get a better interest rate than you would with a bank, and you’ll also reap the rewards of membership.
Applying for a credit union car loan makes sense if you want to get excellent service, answers to your questions and a competitive interest rate.
To learn more about Addition Financial’s flexible car loan options, please click here.