Interested in a loan? Whether you need a home loan, car loan, or other personal loan, MMCCU is here to help our members.
What is a loan? A loan is money you borrow from a financial institution and pay back in full at a later date, with interest. Loans typically consist of principal (the amount you borrow), interest (extra money you pay back, at a percentage rate), installments (how many payments you’ll make), and term (how long you have to pay the loan back, plus interest).
Secured vs. Unsecured: A secured loan typically has a lower interest rate because it is tied to a physical asset (like your home or car). If you can’t pay the money back as agreed, this asset can sometimes serve as repayment in place of the money owed. An unsecured loan (such as a student loan, personal loan, or payday loan) bases its interest rate on factors including your credit score, credit history, income, and existing debt.
Before applying for a loan, we recommend taking these steps:
- Check your credit score (free for MMCCU members) – Those with a higher credit score typically receive better rates and more lender options. If your score is low, work on improving it before you apply.
- Pre-Quality and Compare – You will need to provide information including loan purpose, requested loan amount, preferred monthly payment, and personal financial information.
- Choose a lender – Consider especially the Annual Percentage Rate (APR), which is the total cost of borrowing.
- Have a payment plan budget in place – Make sure you have a plan to pay back the money you will owe.
When you are ready to apply for a loan, you will need:
- Proof of ID (driver’s license, government-issued ID)
- Proof of address
- Proof of employment status
- Education history
- Income details
- Social Security Number
If approved, you will receive funding. Keep in mind that applying triggers a hard credit inquiry, which can lower your credit score. As always, if you have any questions feel free to contact our friendly MMCCU team today!