Need a new car?
Maybe your old beater bit the dust or your bike is no longer cutting it?
A car can be very useful for any student, especially if you have to commute to school or work. But it can also be a costly expense, so if you want to buy a ride and don’t have all the funds required, a car loan from a credit union may be exactly what you need.
Vermilion Credit Union, which has branches in Vermilion and Mannville, has been around since 1943 and offers a variety of products and services from savings accounts to mortgages to car loans. Like all credit unions, members of Vermilion are owners, which means member-owners are rewarded by banking with and supporting the credit union and the community.
So, if you need a little help buying your first (or fifth) vehicle, come down to Vermilion Credit Union and speak with Bobbi Jo Lysons, Financial Services Advisor with Vermilion Credit Union.
“We are a credit union that makes credit decisions in branch, so coming to us can make getting your new ride quick and easy,” said Bobbi Jo. “Our staff live, work and play in the Vermilion area and our proud to support our communities by sponsoring local events and volunteering at many organizations in the area, so joining our credit union truly is banking local.”
If you’re ready to get a car loan, book an appointment to speak with an advisor at Vermilion Credit Union today to get started, or read on for more information on the steps to get one!
How to get a car loan:
1. Start by checking your credit score.
This little number plays a big part in determining your eligibility for a car loan. If you have a higher score, you should be eligible for a more favourable loan term and/or interest rate, but if not you may want to work on increasing your score using the tips here before you proceed.
2. Determine your budget.
Review your financial situation and look at how much you can afford to borrow and then repay each month. Once you review your income and expenses, it can be easier to determine what vehicle you can actually afford within your budget and whether new or used is the best option.
3. Do some research.
Don’t just research types of vehicles, but also look at the financial institutions in your area to determine the best fit for you. Credit unions like Vermilion Credit Union are a good place to start, as they may offer lower fees and interest rates than other financial institutions in your area, especially for students. Make sure you compare interest rates, terms, fees and repayment options before deciding.
4. Gather your documents.
To make it quick and easy to apply and get pre-approved for the loan, gather the required documents in advance. Usually you need your identification, proof of income, employment verification and maybe a proof of residence. Depending on the financial institution, you can either get pre-approved then go shopping or apply after you’ve found your new ride. Some car dealerships even facilitate the financing for you after you’ve selected a vehicle – and many work directly with credit unions.
5. Read and sign.
Once you’ve selected a car and your loan is approved, do a detailed review of the terms and conditions to make sure you understand the details before you sign anything. You may be able to negotiate things like interest rate, loan duration, and other terms before you sign.
Typically, the financial institution pays the seller and then you pay them back over time, so once everything is finalized, you can ride off into the sunset!
Types of car loans are available:
- Standard auto loans: loans that involve borrowing a specific amount from a lender to purchase a vehicle and then repaying the lender, with interest, over a predetermined period.
- Secured auto loans: loans that require collateral, often the vehicle itself, so if you fail to repay the lender can repossess the vehicle.
- Unsecured auto loans: loans that do not require collateral but generally come with higher interest rates due to the increased risk.
- Dealer financing: loans offered directly to customers from the car dealership. The dealership obtains the loan via their lending partners or secures other financing options such as a lease.
- A vehicle lease is different than a loan: leases are typically offered directly by the dealership for a new car where you agree to pay a monthly sum and then return the car when the lease period is done (often with parameters in place such as as total kilometers or trade in options).