How to Apply for a Credit Union Auto Loan in New Bedford

New Bedford Credit Union Auto LoanOne of the biggest advantages to belonging to a credit union becomes obvious when you go to get your first auto loan. A credit union auto loan is an excellent way for first time buyers to get the money they need at an affordable rate. In most cases, your local credit union in New Bedford will offer much better terms and rates than you’ll find at any other auto lender in the Southcoast Massachusetts region.

Credit History and Credit Union Membership

There are a variety of factors that your local credit union in New Bedford will take into consideration during the auto loan approval process. The first area focused on is, of course, your credit rating. There are four different credit situations that are used to look at a first time buyers auto loan:

No Credit with Collections – This is the hardest type of credit situation to get approval for with a credit union auto loan. Having no established credit, yet having collections for cell phones, medical bills, utility bills, tax liens or judgements of any kind, is actually worse than having no credit at all.

No Credit at All – The is the second most difficult type of credit situation to try and get a first time buyers auto loan with because there is absolutely no credit at all to evaluate. No good credit. No bad credit. No collections. No history.

Limited Credit – Members who have a limited amount of credit with a short term history of less than two years are easier to approve than applicants with no credit or no credit with collections.

Longer Credit History – By far the easiest type of applicant to approve, even if no auto loans from your past still show on your credit report because it establishes your credit history over a number of years.

The next thing that will be considered in your application is whether you are a member of the credit union or not.

Down Payments and Employment Stability

Two other important areas that your credit union will consider when you apply for a first time buyers auto loan is how much your total down payment will be and information about your employment and employment history. With regard to employment, most credit unions will prefer that you have at least 12 to 18 months on the job. They will also consider how long you have been in working in the same type of job or industry within that period of time.

While it is possible for a first time buyers auto loan to get approved with absolutely no down payment, it is helpful if you are able to provide something down to reduce the monthly payments and show a commitment to purchasing the vehicle. Consider it a “show of faith” to the credit union. They figure the more you are invested, the more invested you are to see the loan through and make all the payments.

Ability to Pay and Total Amount Financed

There are specific formulas used by credit unions to determine whether or not your application can be approved. The first is the DTI or Debt-to-Income radio. Taking into account every bill that you pay out each month, as well as the cost for your new auto loan, your DTI should be no greater than 40% of your gross monthly income.

Another important figure to consider is the total amount that the credit union auto loan will be financing. There is generally a cap on the total amount to be financed by your credit union, up to $60,000.

Other Factors to Consider

In addition to your credit, employment, cost of the vehicle and all of the other factors mentioned above, your credit union in New Bedford will also take into consideration the age and miles of the vehicle you want to purchase. While it may not have any affect on most applications, in some cases, vehicles that are really old or have over 100,000 miles may not be approved.

While not all of the factors listed here will need to be met in order to get a first time buyers auto loan from your local credit union, the more you are able to meet, the easier it will be. If you have difficulties in one or more of the areas, but are doing well in everything else, you could still be approved.

Apply for a Credit Union Auto Loan

Since 1911, St. Anne Credit Union in New Bedford, Massachusetts has been serving members in the surrounding area, providing first time buyers auto loans, home loans, savings accounts and other financial investment opportunities. Currently serving over 3,100 members in Bristol and Plymouth Counties, St. Anne Credit Union is the oldest credit union in Southcoast Massachusetts.

Click here to become a member and find out about all of the investment, savings and lending opportunities available through St. Anne Credit Union. Become a member and experience the credit union difference for yourself.