There may be many reasons that you will need to get a loan, whether you have unexpected vehicle repairs or you need to buy a new vehicle. No matter the reason that you need to borrow some money, a credit union is a great place to start because of their competitive loans. Here are some tips you can use in the process of applying for a new loan from your credit union.
Prepare Your Information
A good place to start in your loan application process is in the preparation for your loan. You probably already have a checking and savings account with a credit union, but there is some additional paperwork and information you will need to have ready. As soon as you start the application process, gather any extra paperwork ready so the process can proceed quickly and smoothly to complete the approval.
Your credit union loan officer is going to look at your financial situation in its entirety, which will include all your debts, any assets, and your credit health. They will need to see that you are going to be able to repay the loan and make the monthly payments for the entire life of the loan. Your work history should show that you have a job currently or some sort of income. It is beneficial to show how long you have worked at your job or in the same industry, and be ready to explain any gaps in your employment. Bring with you your latest pay stubs from the last few months and also your past couple yearly tax returns to show proof of income.
Understand the Terms
In addition to having your documentation for the loan's approval, you should make sure to understand the terms of the loan that you will be applying for. Once you sign the loan contract, it is important you have a good understanding of the interest rate, loan amount, monthly payment amount, and how long you will be paying on the loan so you can adhere to the terms.
Loans come in a variety of lengths. Talk to your lender about your budget, how much you need to borrow, and also how much you can afford to pay each month. When you lengthen the time of your repayment, it will lower your monthly payment but you will end up paying more interest over the life of the loan. However, you can use this variable to your benefit to help you in your loan's repayment and make the payback easier.
Check into the loan's other terms, such as any late fees, and also any prepayment penalties if you choose to pay off the loan early. Then, look at any loan payment or interest rate discount if you set up automatic withdrawal payments with your credit union account.
For more information, contact a credit union near you.