Qualifying for a LoanOur goal is to provide fair and quality service to all members. We offer financial services at affordable rates and provide all members who qualify1 with the same products, services and interest rates regardless of credit score.
Loans are assets of the Credit Union and Financial Service Officers are charged with the responsibility to help members in need with good loans that mutually benefit all members, while protecting the assets of the Credit Union. Our lending policies and procedures are designed to limit the degree of risk associated with any loan request to the benefit of the entire membership.
We are available to accept applications online, by phone, or in the branch, and can usually provide an answer to your loan request the same business day.
What We EvaluateWe review your application and make decisions based on the following criteria: ability to repay, credit history, and collateral.
Your ability to repay current and proposed obligations is critical in the decision to approve a loan. We determine your ability to repay by reviewing the following:
- Gross income2 and any additional available income3
- Monthly obligations and debts such as mortgage/rent payments, vehicle loans and credit cards
- Debt-to-income ratio4
We obtain and review a credit report on all members requesting a loan. We use your report to observe past performance on SECU loans and other credit obligations as an indication of your willingness to repay future obligations.
If your credit report indicates credit blemishes,5 we may be able to make a loan to help improve your credit report or make your debts more affordable by restructuring or consolidating existing debt. We may also be able to help new borrowers establish a credit record.
We assess the value of the collateral securing a loan (e.g., home or vehicle) to determine the collateral’s value in relation to the requested loan amount (i.e., loan-to-value ratio or LTV). Some loan products may restrict the loan amount offered based on the collateral value.
You can also assign funds in your share or Share Term Certificate accounts at the Credit Union as collateral for some loans.6
What if I Don’t Qualify for a Loan?If we are unable to approve your loan request, you are entitled to and will receive an explanation of the reasons for denial. When possible, we may offer an alternative to your request. If you would like to improve your qualifications for future loan requests, we are available to assist with reviewing your credit report and budgeting through our Financial Counseling services.
You may also request to have the Member Loan Review Committee review your denied application. The Member Loan Review Committee is the final decision-making body for all loan requests. They provide an impartial decision in the best interest of the entire membership to assure our members that loan requests receive equitable and full consideration.
2 Gross income is income before taxes and other withholdings.
3 Additional income may be used to qualify for a loan, but it must be consistent and verifiable.
4 The debt-to-income ratio is calculated by dividing total monthly obligations by total monthly gross income. This ratio identifies the portion of a member's gross income that repays monthly obligations and debts. The Credit Union's debt-to-income ratio guidelines state the ratio should generally not exceed 43%. The ratio may be higher based on a member's individual circumstances.
5 A credit report that reflects delinquent payments, judgments, unpaid collections or bankruptcy may hinder your ability to borrow money. Filing bankruptcy usually prevents a member from borrowing additional money, and if the Credit Union has incurred a loss, then a loan would not be approved under any circumstances.
6 You cannot assign retirement funds as collateral for a loan, regardless of whether those funds are on deposit at the Credit Union (e.g., IRA accounts) or with another entity (e.g., your 401(k) or retirement funds on deposit with the State Retirement System).