Vehicle Loans

 

car-loan

For most people, buying a vehicle means obtaining auto financing from a traditional or online lender. Multiple loan types are available, including loans for used and new cars and vehicle loans for motorcycles, RVs, and watercraft.

If you’re looking to get a new everyday or recreational vehicle but need some help with financing, T&I Credit Union is here to help. We offer a wide range of accessible vehicle loans with competitive rates and flexible terms to get you in your new or used vehicle today.

What are Vehicle Loans?

Vehicle loans are financial sources that help cover the cost of a vehicle. When you purchase a vehicle, you use the loan to pay the seller, with the intent of repaying the loan over a set amount of time called a loan term.

Vehicle loans use the car, truck, motorcycle, or other vehicle you are purchasing as collateral to secure the loan. This makes auto loans different from unsecured personal loans, which don’t require collateral.

Online lenders decide an automobile loan’s rate and terms based on the vehicle being purchased. You may see used car loans with higher average rates versus the auto loan rates on a new-car loan. These higher rates are because used cars have less worth than new cars and may have mechanical issues that depreciate their value, exposing the lender to more risk.

Typically, vehicle loans offer a higher maximum loan amount than personal loans, ranging from $5,000 to $100,000 . The average vehicle loan rate is between 2.60% - 19.85%, depending on your type of lender and credit history, with 2 to 6-year loan terms. You may need a downpayment for your auto loan, typically around 10% of the vehicle’s purchase price.

Most credit union auto loans are secured as new-car loans for vehicles purchased through a dealership. Sometimes when buying vehicles like campers or boats, you may need to secure a credit union auto loan to purchase from a private party. Private party vehicle selling differs due to the unregulated nature of the transaction, so you may have to apply for a personal unsecured loan to purchase a used, private seller vehicle.

Choosing a Vehicle Loan Lender

You may have several auto loan options when searching for vehicle financing. Dealerships often offer financing, as do traditional banks, online lenders, and credit unions. Credit union auto loans, like those from T&I Credit Union, typically offer flexible loan amounts, better auto loan terms, and transparent rates than other financing sources.

When searching for a vehicle loan provider, consider the following regarding the auto loan options they offer:

  • Monthly payment amounts
  • Maximum loan amounts
  • Minimum credit score needed for approval
  • Auto loan terms they offer (60, 72, 84 months)
  • Loan repayment terms, including pre-payment penalties
  • Interest rates offered for used or new vehicles
  • Available rate discounts

Use tools like the T&I Credit Union auto loan calculator to estimate the maximum loan you can take out and your monthly payments for different repayment terms and rates. Take into account your monthly income and choose a maximum loan amount that is no more than 10% of your take-home pay each month.

For instance, a 72-month car loan for $12,000 at an average rate of 5.00% would yield monthly payments of about $199 per month, while a loan with the same rate and amount with a shorter term of 60 months would require $232 per month.

Depending on your interest rate, the higher payment can significantly affect the interest payments you pay to the lender over the life of the loan. Opt for the minimum loan amount that will help you finance the vehicle to keep your debt-income ratio low.

Finally, some offers from lenders include what’s known as a prepayment penalty . A prepayment penalty refers to when a lender penalizes you for paying off the debt earlier than the maximum term of the loan. Lenders charge a prepayment penalty so that you keep making loan payments on your new car loan or used vehicle loan for the set amount of time so they can collect the interest.

Most credit unions don’t implement a prepayment penalty, but checking when shopping around for a loan is essential.

Credit Worthiness

After filling out an auto loan application, most auto loan lenders check your credit history (usually through a soft credit pull or soft credit check) to see if you meet their minimum credit score. Those with excellent credit often receive good loan interest rates.

You can get auto loan offers with less-than-perfect credit. However, if your credit profile suggests that you might not follow through on loan payments (like a high debt-to-income ratio, active bankruptcies, or a bad credit score), offers from lenders might be sparse.

Credit approval is possible, even for borrowers with credit scores in the red. Like what we offer at T&I Credit Union, a credit union auto loan typically has lower credit qualifications and a lower minimum credit score than other auto lenders. We understand that people fall on all ends of the credit spectrum, which is why we offer competitive interest rates and flexible loan amounts to help you get

Loan Options at T&I Credit Union

T&I Credit Union provides multiple loan types to help you finance a vehicle purchase. All auto loan offers are subject to a credit review before approval, and terms between 49 and 60 months vary.

 

Motorcycle Loans

We offer the following terms and rates on motorcycle loans:

Purchase

Term

Rate As Low As

Requirement

Motorcycle Loan Rates

New motorcycles made between 2019 - 2022

60 Months

3.99%

10% down payment of the motorcycle’s cost

Used/Refinance (2013 - 2018)

Term varies, with a maximum loan of 60 months

4.99%

NADA Guide Retail Value required

*All Loans are subject to credit review and approval. Rates and offers are subject to change without notice. Actual rates may vary based on credit score. Existing T&I loans excluded. See T&I Credit Union for more information. T&I Credit Union is an Equal Opportunity Lender. Effective 08/15/2022.

RV and Camper Loans

We offer competitive interest rates and auto loan terms on RV and camper loans. Our RV loan terms vary based on the vehicle age and have different down payment requirements.

Purchase

Term

Rate As Low As

Requirement

RV/Camper Loan Rates

New (2017 or newer)

60 Months

3.99%

10% Down payment

New (2017 or Newer)

Over 60 Months

3.99%

15% Down payment

Used/Refinance

60 Months

4.75%

20% Down payment of NADA value.

Used/Refinance

Over 60 Months

4.99%

20% Down payment of NADA value.

*All Loans are subject to credit review and approval. Rates and offers are subject to change without notice. Actual rates may vary based on credit score. Existing T&I loans excluded. See T&I Credit Union for more information. T&I Credit Union is an Equal Opportunity Lender. Effective 08/15/2022.

Watercraft Loans

T&I Credit Union can help you finance a fishing boat, pontoon, or boat, including a bow rider, ski, or deck boat. Our boat loan terms are as follows:

We can also finance your jet ski purchase. Please contact a loan officer for jet ski terms and rates.

Purchase

Term

Rate As Low As

Requirement

Watercraft Loan Rates

New (2017 or Newer)

60 Months

3.99%

10% Down payment of actual cost.

New (2017 or Newer)

Over 60 Months

3.99%

15% Down payment of actual cost.

Used/Refinance

60 Months

4.75%

20% Down payment of NADA value.

Used/Refinance

Over 60 Months

4.99%

20% Down payment of NADA value.

We can also finance your jet ski purchase. Please contact a loan officer for jet ski terms and rates.

*All Loans are subject to credit review and approval. Rates and offers are subject to change without notice. Actual rates may vary based on credit score. Existing T&I loans excluded. See T&I Credit Union for more information. T&I Credit Union is an Equal Opportunity Lender. Effective 08/15/2022.

Auto Loans

Our used car loans and new car loans have the following average car loan interest rates and terms.

Purchase

Term

Rate As Low As

Auto Loan Rates

New car loans for cars made between 2015- 2022:

60 Months

2.74%

72 Months

3.24%

84 Months 4.24%

Used car loans, for all cards 2014 and older:

60 Months

3.99%

*All Loans are subject to credit review and approval. Rates and offers are subject to change without notice. Actual rates may vary based on credit score. Existing T&I loans excluded. See T&I Credit Union for more information. T&I Credit Union is an Equal Opportunity Lender. Effective 08/15/2022.

 

Applying for a Vehicle

The application process for a vehicle loan with T&I Credit Union is straightforward and convenient. You can use our web-based application submission system for an easy online experience to obtain pre-approval. Although this doesn’t guarantee loan approval, it can speed up the formal application process.

When you are ready to fill out your formal application for final auto loan approval, work with one of our helpful loan officers in the T&I Credit Union financial center. Your formal application will require a credit check to assess your creditworthiness for auto loan approval and to determine your auto loan rates. You’ll also need to supply your loan application with the following information:

  • New vehicle information (model, make, value, miles)
  • Personal information (name, social security number, address, and employment information)

After your application submission, you can expect a loan representative to get back to you within 24 to 72 hours. They’ll let you know if you’ve been approved for one of our fixed-rate vehicle loans at competitive auto loan rates.

Credit Score and Credit History

When T&I Credit Union receives your formal application and performs a credit check, we look at several factors to determine your vehicle loan options, including your maximum loan amount, minimum loan payments, and interest rate.

We will assess your debt-to-income ratio, monthly income, and overall credit history and credit score. Generally, excellent credit means better interest rates, while you may have a higher interest rate with bad credit.

A good credit score is typically between 600 and 750 , with a credit score in the 800s being excellent credit. Anything below this range is considered poor credit, with credit in the 300s and below being extremely poor and indicating a subprime borrower.

Monthly Payments

When you sign for an auto loan with T&I Credit Union, you’ll make monthly payments on your loan. You may choose to sign on for direct debit every month for automatic payments to come out of your bank account. Automatic payments are an excellent way to keep your auto loan in good standing and boost your credit. You can sign up for automatic payment through T&I Credit Union’s online banking app.

Additional Offerings

T&I Credit Union offers additional financial solutions for members that can aid you when applying for a vehicle loan.

GAP Insurance

We offer GAP Insurance for cars, motorcycles, watercraft, RVs, and more. Whether you want to take advantage of our $500 Auto Deductible Reimbursement or protect yourself against taking a loss on a totaled car, we have you covered. Our GAP insurance program covers you for the $500 deductible for three years, giving you peace of mind if your new purchase incurs any damages.

Free-Credit Score Analysis

If your score falls on the low end of the credit spectrum, we offer a free credit score analysis along with financial counseling services to help you repair your credit. This program enables you to improve your credit score and credit history so you can reduce your debt-to-income ratio and take advantage of better auto loan interest rates.

As you raise your credit score, you may be able to get a refinance loan to lower your auto interest rate and maximum term loan to a shorter-term and lower interest rate.

After evaluating your credit history, we’ll help you figure out where you can improve. We’ll also offer advice on how to improve a poor credit score; whether that’s by setting up automatic payments, reducing your debt-income ratio, or learning how to manage your finances, we can help you so that you can get the lowest rate on your T&I Credit Union loan.

One-Time Rate Reduction and Skip a Payment Programs

To help you get the most out of our range of auto loan products, we offer a one-time rate reduction and skip a payment programs. With our rate reduction opportunity, you can reduce your current auto loan interest rate for free one time during the life of the loan.

The skip a payment option allows you to skip one monthly payment per year. The fee is $25, and you must submit your paperwork before the payment is due.

female-hands-hold-car-key

Apply for Your Loan Today

The loan process can be stressful, but with T&I Credit Union at your side, it doesn’t have to be. With an online application process , you’ll have a positive online experience. Our accessible vehicle loans and low starting rates make T&I Credit Union the best choice for your auto financing needs.

Contact our team today to learn more about our auto loan application process, current loan interest rates, and available loan options.

 

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