Taking a loan facility like the Denver credit union auto loan to finance your choice car is a great option –the loans are given at affordable interest rates and often, flexible payment plans. Unfortunately, not every first-time buyer will receive a positive loan decision. Credit unions most often base their decision on the following key factors:
- Credit score: Your credit score is crucial; it gives an accurate history of your past loans. If you have a bad rating, you should improve on it before applying for an auto loan.
- Membership: Credit unions naturally give priority to their members in financial matters. Most often, the slots are filled by members even before the general public becomes aware. You will stand a better chance of getting an auto loan approval if you have a valid membership with your local union. To get a Denver credit union auto loan, for example, you might need to become a member of a local credit union.
- Income source/employability: Having a steady source of income or being complied is another essential factor. Credit unions want to know that you have the means to complete loan payments. If you are not currently employed but have good prospects and qualifications, your credit union may consider you for the loan.
- The down payment: The down payment you are willing to make will influence the loan decision. Down payments are typically pegged at a certain percentage of the loan value and are considered upfront payments. If the amount you can afford as a down payment is lower than the loan amount, the loan may not be approved, or you might be asked to reapply for a lower amount.
- Your proposed auto: Your choice of car/vehicle etc. is very essential. Applying for auto loans to purchase cars worth several million may not be a wise plan as cars depreciate as they age. If you are taking a Denver credit union auto loan, for example, you could ask local car dealerships with affordable cars.
- Your payment plan: Your payment plan should be designed to offset the loan as soon as possible. Yet, the plan must be okay with the credit union for the loan to be approved. Talk with your account officer and create a plan that works best for you and the credit union.
- The maximum funds available: Once the total available amount for financing auto loans is exhausted, the credit union may pause loan approvals until further notice.