When granting a loan to our members, the Provo Postal Credit Union will look at the following traits to determine whether or not a loan is a win/win for you and for the Credit Union:
1. Credit – Does the member have strong credit. What has the credit history reflected over the years?
2. Character – What is your prior history with PPCU? Has the history been favorable? Do you pay your bills at PPCU? Have you been stable at your residence or employment? Are you trustworthy?
3. Capacity – Do you have a stable job with enough income to qualify for the debt? Typically, you must be around a 40% debt-to-income ratio or less (only 40% of your gross income can be used for debt payments). Are you able to meet the monthly payment requirement on this and all other loans?
4. Collateral – Is the value of the vehicle or real estate such that the credit Union can protect its member’s assets by making the loan as requested? What is the loan-to-value ratio (LTV) on this piece of collateral? Typically, the LTV must be 80% or less.
5. Capital – Do you have other assets that could be liquidated if need be to make payments on the loan?
6. Conditions – What are the current market conditions? Is it a favorable economy? Does the loan request we have in front of us make sense under current economic conditions?
Some members may be strong in some areas & weak in others. We look at all of the factors & weigh them accordingly. Not meeting every criterion does not necessarily disqualify someone for a loan. By the same token, being strong in many areas may not necessarily qualify someone for a certain type of loan request.
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July 1st, 2010 at 3:45 am
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