Podcast
Questions and Answers
What collateral is required for a signature loan?
What collateral is required for a signature loan?
What is the maximum loan amount for a signature loan?
What is the maximum loan amount for a signature loan?
Which of the following statements is true about the late fee for a signature loan?
Which of the following statements is true about the late fee for a signature loan?
What is the early payoff penalty for a signature loan?
What is the early payoff penalty for a signature loan?
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What is the minimum credit limit for the line of credit (LOC)?
What is the minimum credit limit for the line of credit (LOC)?
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Can members choose their due date for a line of credit?
Can members choose their due date for a line of credit?
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What is the transfer fee associated with the line of credit?
What is the transfer fee associated with the line of credit?
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What type of rate applies to a signature loan?
What type of rate applies to a signature loan?
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For a K-12 tuition loan, how are the funds disbursed?
For a K-12 tuition loan, how are the funds disbursed?
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What is the primary purpose of obtaining the last two recent pay stubs during the income verification process?
What is the primary purpose of obtaining the last two recent pay stubs during the income verification process?
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What factor is crucial when excluding debt from the Debt to Income Ratio (DTI) calculations?
What factor is crucial when excluding debt from the Debt to Income Ratio (DTI) calculations?
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Which loan type does not require Debt to be excluded or included in Debt Ratio calculations as mentioned in the content?
Which loan type does not require Debt to be excluded or included in Debt Ratio calculations as mentioned in the content?
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How does the credit rating system impact joint applicants seeking loans?
How does the credit rating system impact joint applicants seeking loans?
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What is the implication of risk-based pricing at Alliance Catholic Credit Union?
What is the implication of risk-based pricing at Alliance Catholic Credit Union?
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What situation would typically result in debt being added back into DTI calculations?
What situation would typically result in debt being added back into DTI calculations?
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In what circumstance should an applicant's previous loan be excluded from the debt liabilities?
In what circumstance should an applicant's previous loan be excluded from the debt liabilities?
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Which loan type is specifically evaluated using the risk-based pricing model?
Which loan type is specifically evaluated using the risk-based pricing model?
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What is required from an applicant to verify the ability to repay a loan?
What is required from an applicant to verify the ability to repay a loan?
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What additional documentation may be required from self-employed applicants?
What additional documentation may be required from self-employed applicants?
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How does risk-based pricing affect the interest rate borrowers receive?
How does risk-based pricing affect the interest rate borrowers receive?
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What must an applicant do if they cannot demonstrate the ability to repay their loan?
What must an applicant do if they cannot demonstrate the ability to repay their loan?
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What implications does a low credit score have for an applicant seeking a Christmas loan?
What implications does a low credit score have for an applicant seeking a Christmas loan?
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What is the first step in checking a borrower's information during the loan application process?
What is the first step in checking a borrower's information during the loan application process?
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Which income should not be included when calculating a borrower's income?
Which income should not be included when calculating a borrower's income?
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Which document is NOT required to prove income for loan applicants?
Which document is NOT required to prove income for loan applicants?
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What is the credit score range categorized as 'poor'?
What is the credit score range categorized as 'poor'?
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What is the maximum debt-to-income ratio allowed for unsecured loans without Credit Committee approval?
What is the maximum debt-to-income ratio allowed for unsecured loans without Credit Committee approval?
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What is the required minimum credit score to qualify for unsecured loans specifically targeted at A & B borrowers?
What is the required minimum credit score to qualify for unsecured loans specifically targeted at A & B borrowers?
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How should weekly income be calculated for a borrower who is paid bi-weekly?
How should weekly income be calculated for a borrower who is paid bi-weekly?
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Which situation allows waiving proof of income for an unsecured loan?
Which situation allows waiving proof of income for an unsecured loan?
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What is considered a good credit score for loan qualification?
What is considered a good credit score for loan qualification?
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Study Notes
Alliance Catholic Credit Union Loan Programs
- Risk Based Pricing: Credit union uses Experian credit scoring system to determine interest rates on loans. Joint applicants are assigned the best score of both individuals.
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Trade Line Editor: Allows for adding or excluding debt from Debt-to-Income Ratio (DTI) calculations based on specific loan scenarios.
- Excluded debt: When paying off or refinancing existing debt at another institution
- Included debt: Multiple loans applied at the same time or debt not reported on credit report
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Income Verification: Requires the latest two pay stubs to verify employment, pay frequency, and consistency.
- Overtime and bonus income are not included in income calculation
- Bi-weekly income calculation: Sum the last four deposits, divide by four, multiply by 1.25, multiply by 26, and divide by 12.
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Waiving Proof of Income: Possible for unsecured loans under specific criteria:
- Existing member for at least one year
- Debt-to-Income ratio up to 55% (Credit Committee approval required for exceeding 55%)
- Unsecured loan amount up to $10,000
- Employed for at least two years or two years in the same field
- Borrowers with FICO Credit Score 700 and above
- Bankruptcy score 500 or less
- Unsecured ratio 40% or less
- Total unsecured debt with ACCU 25% or less
- Borrowers cannot be self-employed
Loan Types and Requirements
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Proof of Income:
- Paystubs: Two most recent
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Tax Returns:
- Business: Last two years complete returns, including all schedules
- Personal: Last two years complete returns, including all schedules (if self-employed)
- Other: Specific documents may be required depending on the loan type
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Auto Approval Requirements: Credit Report Information
- Credit Score Ranges: 300-850 (Most FICO and VantageScore models)
- Credit Score Categories:
- Poor (300-579): Difficulty qualifying for loans and credit cards; higher fees and interest rates
- Fair (580-669): Easier loan and credit card qualification with decent terms
- Good (670-739): Qualification for loans and credit cards with low fees and interest rates
- Very Good (740-799): Qualification for most lenders' credit accounts with low advertised interest rates
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Line of Credit (LOC)
- Fixed or Variable Rate: Variable
- Can Members Choose Due Date: No, set for the 28th of the month
- Can This Account be an Overdraft Protection Source: Yes
- Minimum Credit Limit: $500
- Maximum Credit Limit: $5,000
- Early Payoff Penalty: No
- Late Fee: Greater of $15 or 15% of interest due, after 10 days
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Signature Loan
- Application Fee: None
- Available Terms: 12-60 months
- Fixed or Variable Rate: Fixed
- Can Members Choose Their Due Date: Yes
- Collateral Required: No
- Minimum Loan Amount: $500
- Maximum Loan Amount: $30,000
- Early Payoff Penalty: No
- Late Fee: Greater of 15% of interest due or $15, after 10 days
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Tuition Loan (K-12)
- Available for any eligible private K-12 school
- Funds disbursed via Cashier Check
- No application fee
- Terms up to 12 months
- Fixed interest rate
- Minimum loan amount: $1,000
- Maximum loan amount: $6,000
- Members can choose their due date
- Late fees applicable after 10 days
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Home Improvement & Celebration Loans
- Unsecured loans for personal financing needs
- Home Improvement: Targets renovations or furnishings
- Celebration: Funds life events like graduations or weddings
- Loan Amounts: Up to $30,000
- Terms: Up to 60 months
- Initial payment deferral: Up to 90 days
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Christmas Loan
- Loan Type: 275
- Interest Rate: As low as 8.49% APR
- Terms: Up to 12 months
- Maximum loan amount: $4,500
- Special Expires: December 31, 2024
- One Christmas loan per account
- Risk Based Pricing for Christmas Loan:
- A (720+): 8.49%
- B (719-680): 9.49%
- C (679-640): 10.49%
- D (639-600): 11.49%
- E (599 and Below): 12.49%
- Risk Based Pricing for Christmas Loan:
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All Loans:
- Require membership eligibility
- Applicants must be at least 18 years old
- Interest rates are subject to change without prior notice and depend on credit ratings.
General Loan Information
- Funds can be deposited directly into member's accounts unless lending department restrictions exist.
- Loan funds for debt consolidation are typically disbursed via check payable to creditors.
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Description
This quiz explores the various loan programs offered by Alliance Catholic Credit Union, focusing on key features such as risk-based pricing, trade line editor, and income verification. Understand how these components impact the loan application process and eligibility for different types of loans.
