• What is the applicable nature of interest rate: You may borrow a loan under fixed or variable interest policy. In the former, the amount you need to pay each month will be fixed and thus enables you to plan your expenses. In the latter, the monthly payment may differ as interest rate may fluctuate based on market trends.

• Am I required to buy my vehicle from a licensed dealership: Some lenders insist that you buy your vehicle from a particular dealer. Ask them if there is any such pre-condition so you can decide beforehand if you are willing to be flexible regarding the dealer’s choice.

• Are there any penalties on my loan: You should ask the lender if there are any additional charges levied if you pay off the entire loan amount ahead of its tenure. Also, in case you are facing some temporary financial crisis, verify if they allow you to skip a payment. Do inquire about the terms and conditions for all such conveniences.  

• What is the precise price that I will be paying at the end of the loan term: It is advisable to know the exact amount that you will end up paying (including the rate of interest) at the termination of loan term. This will help you determine if the loan is reasonably priced or not.

• What is the exact amount that is being financed: You must know the correct breakup of the amount, both which is being financed and that required from your end as down payment. Some financial institutions require a fixed percentage of the vehicle’s value as down payment.

• What are the finance charges: Another important part of the loan amount are the additional charges like handling fee, paperwork fee etc. Ask your lender if they have included all the charges in the amount quoted or you need to pay them separately.

• Refinance: If you get a better interest rate, you should consider refinancing your auto loan. You should avoid extending the tenure of the loan lower the monthly payments as it incurs higher interest rates.

• Research: You should evaluate the different loan amounts, tenures and interest rates offered to get the most affordable auto loan. You can consider a credit union to get the best interest rates and easy approval for the loan.

• Additional payments: If possible, you can consider making additional payment for your auto loan. This will shorten the overall loan tenure and subsequently lower the amount of interest that needs to be paid.  

• Do not skip a payment: It is imperative that you make the payment before or on its due date to avoid any late fees. Delaying a payment incurs more interest and increases the cost of the loan.

• Credit score: You should maintain a clean credit record to ensure a lower interest rate. Previous loans, bank accounts and all other financial transactions should be genuine. The agent will conduct a complete credit check to ensure that you will be able to pay back the loan amount and interest rate.

• Read the terms: It is advisable to read the terms and conditions carefully to ensure that you are getting the best deal. You should be acquainted with the exact loan amount, interest rate, monthly due dates and any other clauses that may affect your loan amount.

• Negotiate: You can consider discussing your budget and requirements with the agent to get the best deal. You can also inquire about any factors that can assist in reducing interest rates for the loan amount.

• Loan Eligibility: The home loan amount depends on your income and previous loan record. There may be a significant difference in the online quoted amount and the actual loan sanctioned. Thus, you should have a clear idea about the loan plan you are eligible for.

• Budget: You must evaluate your budget before applying for a home loan. This will help to determine the amount you can pay upfront for the home and the remaining can be applied for as loan. The budget also assists in deciding on a monthly amount that you can afford.

• Credit Score: You should maintain a clean and dependable credit score. Maintenance of bank accounts, credit card usage, existing loans, payment of bills, all these can affect the interest rate charged on your home loan.

• Interest Rate: The type of interest rate determines the amount you would have to pay every month. You can select between fixed rate and floating rate home loan. You can make the choice depending on your financial condition and current market rates.

• Loan Duration: This will determine the interest amount and its portion that you will have to pay every month. A longer tenure will reduce the monthly payments but will eventually result in more interest payments.

• Documents: You must ensure that you read the documents carefully before signing. All verbal contracts and negotiations must be in written. You should check the applicable charges, processing fee, late charges etc.

• Research: It is essential to get quotes for different home loan policies and choose the one that best suits your needs. You can consider a credit union for low interest home loans.

• Extra Charges: You must be aware of any extra charges that may be incurred during the course of the loan repayment. It is important to clarify the queries during the initial stage to avoid paying processing fee at a later stage.

• Determine The Loan Amount: Firstly, the most important thing is to determine the amount that you need to borrow from the credit union. Depending upon the price of the car, interest rates and monthly installments, you must figure out the funds that you would be able to pay off easily.

• Decide The Term Of Loan: Ideally, the duration of an auto loan should be around five to six years. Although a longer tenure can help to lower the monthly payments, but you will end up paying more interest in due course. Therefore, you should settle on a loan term that allows you to manage repayments easily while saving on the interest payments.

• Know Your Credit Score: Your credit rating has a great impact on the interest you will be charged on your auto loan. Hence, before applying for the loan, you must look at your credit score to check if it reflects any unpaid loans, credit card debt, late payments etc. If possible, devote some time to improve your rating by paying off all the debts and making timely payments. This will help you get a better interest on your auto loan.

• Get Pre-Approved: Getting a pre-approval for an auto loan will help you decide the price range in which you can buy the car. You should also make allowance for other costs associated with car buying such as taxes, insurance, initial down payment and maintenance expenses.

• Close The Deal: When you have finalized the amount, tenure and negotiated a fair interest rate, you must now submit the loan application. You may need to provide your proof of income, residence, identity, social security number and other important documents along with the application.

• Lower interest rates: Credit unions, being non-profit organizations are not liable to pay any taxes to the state or federal government. As a result, they offer considerably lower interest rates on car loans. This means that your monthly payments will be low and you can save more.

• Flexible terms and conditions: The terms and conditions of car loans are usually flexible at a credit union. Working with a client centered approach, the credit unions are more considerate towards the financial needs of the members. Their policies are flexible enough to adjust the repayment options and loan duration according to the convenience of the clients.

• Better customer services: The credit union is easy to approach and there are lesser formalities involved in the car loan application process. Their staff provides complete assistance to the clients in filling out the application form and getting the paperwork ready.

• Convenient loan process: The process of getting loan is more relaxed at credit unions. The clients can even apply for a car loan through the credit union’s website. This eliminates the need to be physically present at their office.

• Membership benefits: The credit unions also offer various other banking and financial services to their members. This includes wire transfer, payroll deduction, notary service, savings accounts, direct deposit, ATM, ACH origination, MasterCard Gift Cards etc.

• Members have a say: All the members are stakeholders and part owners of the credit union. Therefore, they are given the right to choose the board of directors and vote on the important matters concerning loan rates, terms and working of the credit union.

• Know The Jargons: It is essential to have a clear understanding of the terminologies involved in the home loan process to avoid misunderstandings. Some of these are annual percentage rate (APR), refinance, loan to value ratio, fixed rate, floating rate etc.

• Determine Your Budget: You must set some time aside to determine your financial position taking into consideration the insurance and taxes. If possible, you should consider making a higher down payment against the loan. This will reduce the overall interest rate and subsequently lower your monthly payments.

• Know Your Eligibility: The loan amount that you are eligible to borrow from a credit union depends on factors such as your annual income, previous loan payment records, credit card dues etc. In case you have any other liabilities, like a personal or auto loan, your eligibility may drop.

• Tenure Of The Loan: Your monthly payment will be inversely proportionate to the tenure of the home loan. If you choose a longer tenure, the EMI will be less and if the duration is shorter, the installments will be high. However, longer duration loans also increases the total amount of interest paid. Therefore, you should carefully weigh all the alternatives to choose the appropriate loan tenure.

• Type Of Interest Rate: In a fixed rate loan, the EMI does not change throughout the repayment tenure. On the other hand, in a variable rate loan, the EMI keeps on changing according to prevailing base rates in the market.

• Better Chances Of Loan Approval: A credit union does not have stringent income requirements like a bank. It provides flexible and affordable loan options to suit the need of all clients. Moreover, the staff at a credit union is more receptive to the clients’ requirements and is often willing to make reasonable changes in the terms of the loan.
• Lower Rates Of Interest: This is the biggest reason why most people choose credit union for an auto loan. A credit union offers much lower interest rates than banks or any other financial institution. Whether you are going to purchase a new or used car, the approximate cost of loan from a credit union would be almost half of that at a bank. Subsequently, the monthly or annual payments are also quite low and easy-to-pay. 
• Simpler Loan Process: The process of applying for an auto loan is also much simpler and convenient at a credit union. There are no complex forms to be filled or documents that need to be submitted. The staff at the credit union also provides complete assistance to clients about the process in a smooth manner. Usually, the loans are approved within a few days after all the documents have been verified. 
• Non-Sales Approach: Unlike most traditional banks, the staff a credit union does not work towards making a sale or earn any sort of bonuses. They work solely for the benefit of their clients and easing their financial difficulties. All the profits earned by the credit union are returned in the form of low interest rates, dividends or other services to the clients. The representatives will understand your requirements and put forward the most suitable loan option.
  

• Improve Your Credit Score: Before you apply for a secured loan it is essential that you have an accurate knowledge of your credit rating. If it shows any loan defaults or late payments, you are likely to be quoted a higher interest rate. Hence, you must contact a reliable financial institution and ask for ways in which your credit score can be improved.

• Offer Valuable Collateral: Another important factor that can help you get a better rate is to offer a valuable collateral against the loan. The collateral's market value should be at least equal to or more than the amount of money that you intend to borrow. This will make the lender comfortable and sure about your trustworthiness and solemnity in repaying the loan.

• Analyze Your Needs: You should carefully analyze your financial needs before applying for a secured loan. Make sure that you borrow only the amount of money that you actually require. A higher loan amount is most likely to correspond to a higher interest rate. You should also try to opt for a smaller duration to repay the loan to avoid more interest payments in the end.

• Compare Different Policies: Lastly, it is equally important that you compare the rates of policies and the insurance premiums. A credit union is likely to offer much lower interest rates than banks and other financial institutions. However, you must do thorough research about the policies and terms offered by them.

• Quick loan approval: A credit union considers the loan application of the members irrespective of their credit history. It offers quicker approval and is flexible in the loan terms as well.
• Competitive and reliable: Being non-profit organization, the credit union is member owned and operated. Thus it offers lower interest rates that make the loan more affordable and at flexible terms. The union uses the generated revenue to offer lower fees and lower rates.
• Personalized service: The credit union offers customized services to the members. You can discuss your loan needs with the staff and they can offer personalized loan solutions. You can also opt for flexible repayment options and gain from the professional support of the staff. They not only offer you repayment solutions according to your needs but also guide you on buying a suitable car. 
• Guidance available: The credit union offers guidance about taking the right decisions while assessing the value of cars. The staff helps you calculate the real value of your car, if you are a new buyer. They also help you better understand your financing options. 
• Not sales focused: Unlike banks, the credit union is non-sales oriented, so it do not offer bonus or other compensation to the lenders. The union returns whatever profit they earn to the members in the form of low interest rates on savings accounts, financial products and loans. 
• Easy loan process: It is quite easy to apply for auto loan as members can go to the credit union office and discuss the needs face-to-face with a loan office. The members can apply for the loan at particular dealership, over the phone or online. The staff is very friendly, courteous and assists the members in applying for a loan.
  

We, at Greater Central Texas Federal Credit Union, provide secured and unsecured auto loans to all our members. For more information, call at (254) 690 – 2274.