Unsecured Loan Product Knowledge.pdf

Credit Card: The ACCU Mastercard Credit Card is an open-end revolving loan. Members can choose between a Mastercard Rewards or Mastercard non-rewards. Members with the rewards card will earn points for purchases and use the points to redeem Alliance Rewards. Application Fee None...

Credit Card: The ACCU Mastercard Credit Card is an open-end revolving loan. Members can choose between a Mastercard Rewards or Mastercard non-rewards. Members with the rewards card will earn points for purchases and use the points to redeem Alliance Rewards. Application Fee None The credit card rate the member receives is a variable rate Fixed or Variable that will adjust monthly with prime. Payment is 2% of the Rate: statement balance or $25.00 (whichever is higher) Can Members Choose Their Due No, it's based on statement cycle dates. Date: No, in most cases unless the member is applying for a share Collateral secured credit card. Then shares on deposit will be pledged Required: for the credit limit. Minimum Credit $500 Limit: Maximum Credit $30,000 Limit: Balance Transfer None Fee:  Application Fee None Reissue Fee for Lost No or Stolen Card: Reissue Fee for Yes, if not lost or stolen Same Card #: Early Payoff No Penalty: Late Fee: $30 Lost, Stolen, or Member can call 1-844-408-2228 Suspicious Activity: Additional Information Alliance Rewards o Redeem rewards through Digital Banking o Reward points do expire (3 years), members will be notified 6 months before they expire. Overdraft Line of Credit An Overdraft Line of Credit (ODLOC) is a revolving line of credit used to cover the member’s checking account in the event of an overdraft. An advance can be made on the ODLOC regardless of the Checking Account balance. Application Fee: No Fixed Rate. Payment is 2.75% of the statement Fixed or Variable Rate?: balance or $15.00 (whichever is higher) Can Members Choose Their No, all LOC are set for the 28th of the month Due Date: Can This Account be an Yes Overdraft Protection Source: Transfer Fee: No Collateral Required: No Minimum Credit Limit: $500 Maximum Credit Limit: $5,000.00 Early Payoff Penalty: No Yes, the greater of $15.00 or 15% of the interest Late Fee: due, after 10 days Signature Loan A signature loan is a closed-end “personal” loan that uses the borrower’s “signature” and promise to pay as collateral – therefore, it is an unsecured loan. A signature loan can be used for almost any purpose (i.e., wedding, vacation, holidays, etc.). Application Fee: None Available Terms: 12-60 Months Fixed or Variable Rate: Fixed Can Members Choose Yes Their Due Date: Collateral Required: No Minimum Loan $500 Amount: Maximum Loan Amount $30,000 : Early Payoff Penalty: No Yes, if your payment is more than 10 days late, you will Late Fee: be charged the greater of 15.00% of the interest due or $15 Additional Information  Funds from this loan can be deposited directly to the members account as long as there are no restrictions from the lending department. Loans that are used for debt consolidation will typically require checks payable to those debtors. Tuition Loan (K-12) The K-12 tuition loan is a closed-end loan that helps members who wish to finance the cost of private school tuition for children attending grades K-12. Any private K-12 school is eligible for this loan. Funds are disbursed by Cashier Check payable to the child's school. Application Fee: None Available Terms: up to 12 Months Fixed or Variable Rate?: Fixed Can Members Choose Yes Their Due Date?: Collateral Required?: No Minimum Loan Amount: $1,000 Maximum Loan Amount $6,000 : Early Payoff Penalty: No  Application Fee: None Yes, if your payment is more than 10 days late, you will Late Fee: be charged the greater of 15.00% of the interest due or $15 Unsecured, Signature, Personal loan, Celebration Loan, Home Improvement Loans are all the same type of loan. These Loans for extra money for an unexpected expense, a special occasions, or other personal needs. Home Improvement Loan: Looking to hire someone to help you make some home improvements? Or maybe it’s time to refurnish the family room? The sales person you’re working with may try to talk you into financing it with them. Be careful! They will make it sound cheap and easy, but the interest rate you pay may end up costing you more than you think. With a Home Improvement Loan from Alliance Catholic Credit Union, you are able to get competitive rates and work with people you know and trust. Leave the remodeling to the experts in remodeling and the financing to the experts in financing! Celebration Loans Life gives us many things to celebrate, the birth of a baby, graduations, weddings and so many more. Life also brings us times when we need a little help making those celebrations into the memories we’ll cherish for a lifetime. We offer our Celebration Loan for just that reason. The Celebration Loan offers: LOW, competitive rates for up to 60 months Loan amounts up to $30,000 Up to 90 days to make your first payment ** Annual Percentage Rate. All rates subject to change without notice. Existing ACCU loans are ineligible for promotional rates. Rates based on your credit bureau score. Rate is for an Unsecured Loan; minimum loan amount $500, maximum credit limit $30,000. Other terms available at different rates. All loans are subject to approval and membership eligibility. Must be at 18 years of age to apply. Restrictions may apply. Platinum Rewards Get rewarded. Every day, every purchase! *APR on balance transfers (during first 90 days) 7.99% for the life of the balance* *APR on all purchases, cash advances and balance transfers after 90 days = 15.25 – 24.25%  Alliance Rewards with every purchase: 3 points per $ for spotlighted merchant purchases** 2 points per dollar for gas & groceries 1 point per dollar for everything else No Annual Fee No Overlimit Fee Mobile Wallet Ready ~ Protect your credit with Card Controls Mastercard Platinum Benefits i ACCU Mastercard Consumer Disclosure Platinum Contactless meets savings. 7.99% APR on balance transfers (during first 90 days) for the life of the balance* *APR on all purchases, cash advances and balance transfers after 90 days = 13.75 – 22.75% Minimize your payment with a lower rate card No Rewards COMBINED NOTES: ACCU Mastercard Credit Card Open-end revolving loan with options for Rewards or non-Rewards card. Rewards card earns points redeemable through Alliance Rewards. No application fee required for the card. Variable interest rate adjusts monthly with prime rates. Due dates are fixed based on statement cycle dates. No collateral required unless applying for a share secured card. Minimum credit limit set at $500, maximum limit 30,000. No balance transfer fee or reissue fee for lost/stolen cards. Reissue fee applicable for same card number, except in cases of loss/stolen. No early payoff penalties but a late fee of $30 applies. Members report lost or suspicious activity by calling 1-844-408-2228. Reward points expire after 3 years, with notifications sent 6 months prior. Overdraft Line of Credit (ODLOC) Revolving credit line covers checking account overdrafts. No application fee and fixed interest rate applies. Due dates are fixed at the 28th of every month. Minimum credit limit begins at $500, maximum limit is $5,000.  No early payoff penalties. Late fee set at the greater of $15 or 15% of interest due after 10 days. Signature Loan Closed-end personal loan secured by the borrower's signature. Unsecured loan available for personal expenses like weddings or vacations. Application fee is waived; loans range from 12 to 60 months. Fixed interest rate and members can choose their due date. Minimum and maximum loan amounts vary between 500to500 to 500to30,000. No early payoff penalty; late fees apply for payments over 10 days late. Tuition Loan (K-12) Closed-end loan designed for financing private school tuition for K-12. Available for any eligible private K-12 school with funds disbursed via Cashier Check. No application fee with terms up to 12 months and a fixed interest rate. Minimum loan amount is 1,000,maximumamountis1,000, maximum amount is 1,000,maximumamountis6,000. Members can choose their due date, with late fees applicable after 10 days. Home Improvement and Celebration Loans Both are unsecured loans aimed at personal financing needs. Home Improvement loans target renovations or furnishings with competitive rates. Celebration Loans assist in financing life events like graduations or weddings. Both loans offer amounts up to $30,000 and terms up to 60 months. Initial payment can be deferred for up to 90 days. Additional Information All loans require membership eligibility, with applicants needing to be at least 18 years old.  Interest rates are subject to change without prior notice and depend on credit ratings. Christmas Loan (Loan Type: 275) As low as 8.49% APR up to 12 months Maximum loan amount $4,500.00 Special Expires: December 31, 2024 One Christmas loan per account Christmas Loan - Maximum loan amount of $ 4,500.00 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 Applicants must demonstrate the ability to pay. Verification of income may be required in the form of a paycheck stub, direct deposit, or written verification from the member’s employer. If the applicant cannot demonstrate the ability to repay, a qualified joint applicant who has the means to repay and agrees to joint liability must be obtained. If the member is self-employed, the loan officer or Credit Committee may require W2, signed tax returns and/or a profit and loss statement. If verification of income is waived, the reasons for the waiver need to be documented on the application. Risk Based Pricing The credit union has adopted credit-based pricing so that we are more able to become the lender of choice for all members by offering the best possible rate based upon each individuals credit profile. Risk based pricing allows Alliance Catholic Credit Union to service those members who are less credit worthy by offsetting the risk of potential loan loss. Alliance Catholic Credit Union is providing a service to these members rather than having them resort to financing at a higher rate finance company. In addition, members with a good credit profile can qualify for lower rates at Alliance Catholic Credit Union, and establish or maintain their relationship. Advantages: 1. Loans are available to a broader member base 2. Increased profitability/capitalization 3. Allows the credit union to Manage vs. Minimize risk 4. Improves our competitive advantage Loans evaluated with Risk Based Pricing 1. Auto Loans (new and used) 2. Classic Vehicle’s 3. Motor Homes, Travel Trailers and other recreational vehicles (new and used) 4. Motorcycles (new and used) 5. Boats (new and used) 6. Closed End Unsecured Loans 7. Home Equity Loans 8. Credit cards. We will use credit rating systems provided by Experian for determination of the interest rate. This scoring system is an objective system. Joint applicants will be assigned one score based on the best credit score of the applicants, and this score will determine the interest rate of the loan. Decision - Trade Line Editor Viewing Tradelines allows for the addition or exclusioSEEn of debt from the overall Debt to Income Ratio (DTI) and Decisioning Rules. Debt is typically excluded when we are paying off or refinancing existing debt at another institution. Because we are taking over the debt, we exclude the original from the Debt Calculations. Debt is typically added when more than one Loan is applied for at the same time or where debt is not included on the Credit Report. (Ex. Purchasing 2 Snowmobiles would require 2 loans. Adding the other loan to each application will update the DTI to include both debts in the calculations) When to Exclude Debt If the account being paid off is to be closed, then exclude the debt from the liabilities and state in the notes which debt is to be paid off and closed. If the balance on the account is only being paid down, the debt will remain a part of the liabilities and NO exclusion is to be done. If the loan applied for does not require Debt to be excluded or included in the Debt Ratios, continue with the loan application. Income Verification It is extremely important to obtain the last two recent pay stubs to identify the pay periods and pay frequency for accurate and consistent income. Pay stubs need to be recent to verify the borrower is currently employed at that company, you can ensure the pay stubs are the most recent by looking at the pay period dates. Make sure the borrower's name, address, and employer information matches what is listed on the application.  We do not use overtime or bonus income when calculating income as the funds are not guaranteed. Do NOT add loan notes regarding a member’s immigration or citizenship status Bi-weekly: Add up the last 4 deposits and then divide by 4. You then will times by 1.25 (averages the taxes) next times by 26 and divide by 12. SEE INCOME VERIFICATION HELP SHEET in KnowledgeBASE, under PROCEDURES, under LOAN PROCESSING, under INCOME VERIFICATION. ALSO SEE WHEN TO WAIVE PROOF OF INCOME. Waive Proof of Income: Unsecured Loans Existing member (1+ years) Debt vs. Income up to 55% Credit Committee Approval, if over 55% Unsecured Loan Amount up to $10,000 2+ years on the job (or total of 2 years in the same line of work) A & B borrowers, FICO Credit Score 700 and up Bankruptcy score 500 or less Unsecured ratio 40% or less Total Unsecured Debt with ACCU 25% or less Borrower(s) cannot be self employed Thank you for choosing Alliance Catholic Credit Union for your lending needs. To offer the best service to you, please provide the following loan documents prior to your loan closing. Proof of Income: o Two (2) most recent paystubs o Tax Returns: Business: (2) complete, most recent years business tax returns including all schedules. (2) complete, most recent years personal tax returns including all schedules. Personal: if self-employed, (2) complete, most recent years including all schedules. o Other: ___________ AUTO APPROVAL REQUIREMENTS: Credit Report Information: Credit Score Ranges Most FICO and VantageScore models range from 300 to 850. Higher scores indicate lower risk to lenders. Industry-specific FICO scores can range from 250 to 900. Credit scoring models often categorize scores into smaller ranges (e.g., poor, fair, good, excellent). Credit Score Range Categories & Implications Poor (300-579): Difficulty qualifying for loans and credit cards; higher fees and interest rates if qualified. Fair (580-669): Easier loan and credit card qualification with decent terms, especially at the higher end of the range. 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. Excellent (800-850): Likely already receiving best offers; provides additional leeway if the score fluctuates. Factors Influencing Credit Scores (FICO) Payment History (35%): On-time payments are crucial. Late payments, collections, and bankruptcy negatively impact scores. Amounts Owed (30%): Outstanding balances and credit utilization ratio (balances/credit limits) significantly affect scores; lower utilization is better. Length of Credit History (15%): Older accounts generally improve scores. Credit Mix (10%): A mix of revolving (credit cards) and installment (loans) credit can be beneficial. Recent Credit Applications (10%): Many new credit applications (hard inquiries) can slightly lower scores. Factors Influencing Credit Scores (VantageScore)  Payment History: Extremely influential; on-time payments are key. Total Credit Usage: Highly influential; low credit utilization is beneficial. Credit Mix and Experience: Highly influential; diverse credit history and experience matter. New Accounts Opened: Moderately influential; too many new accounts can negatively impact scores. Balances and Available Credit: Less influential compared to other factors. Checking Credit Scores Various sources offer credit score checks. The score may vary depending on the scoring model and credit report used. Free sources may provide limited information; paid services may offer more comprehensive reports. Experian payment history codes show whether an account is current/on-time and its payment history. The payment history may be displayed in a chart showing the month and year the data was reported. Examples of payment statuses are: ND or dash ("-"): No data for this time period OK: Current/terms of agreement met 30 to 180: The number of days past due CLS: Closed BK: Bankruptcy (for example, Chapter 7 or Chapter 13) C: Collection CO: Charge off D: Defaulted on contract F: Foreclosed FS: Foreclosure proceedings started G: Claim filed with government  IC: Insurance claim PBC: Paid by creditor R: Repossession VS: Voluntary surrender Personal Information Personal data reported to Experian can come from various sources, causing potential variations, such as: Name variations (e.g., Lillie Consumer, Lilly Consumer) listed under "Also Known As." Social Security number variations displayed, but the actual number is not shown for security reasons. Addresses associated with accounts may include work or friend's addresses without affecting creditworthiness. Year of birth, phone numbers, and names of joint account holders or co- applicants may also be reported. Employment details provided by creditors do not reflect full work history and do not impact credit scores. Account Information Accounts include revolving credit and installment loans such as credit cards and mortgages. Creditors are not obligated to report account details, leading to potential inconsistencies among credit bureaus. Key account details include: Account name, number (partially hidden for security), status (open, closed, etc.), and date opened. Account type (e.g., installment loan, credit card), credit limit, original loan amounts, and payment history.  Payment status codes indicate whether payments are on time or overdue, impacting credit scores. Collections Accounts overdue for a significant period may be sent to collections, which negatively affects credit scores. Collection accounts are identified by the original creditor's name and include details like the original loan amount, balance owed, and status date. Credit Inquiries Credit inquiries track who accessed your credit report and remain for up to two years. Hard inquiries occur when applying for credit, potentially affecting scores, while soft inquiries do not impact scores and occur for non-lending checks. Inquiry details include business name, type, inquiry date, and removal date. Public Records The only public record that appears on credit reports is bankruptcy. Chapter 7 bankruptcy discharges debts, while Chapter 13 requires a repayment plan. Chapter 7 records are removed after 10 years; Chapter 13 after 7 years. Disputing Credit Report Information Consumers have the right to dispute incorrect information on their credit reports. Common dispute reasons include errors from creditors or fraud. Disputes can be initiated online, by mail, or over the phone with Experian. The dispute process typically resolves within 30 days, with updates available through your Experian account. Experian Credit Report It is important to review Credit Reports for accuracy of information, fraud, and credit worthiness. You can also utilize the Credit Report to compare savings opportunities for the member. Fair Isaac Risk Model v2 (Credit Score) Lists the members credit score. Also lists factors influencing the score. Score range ??? - 850. Bankruptcy Score Lists the members Bankruptcy score or risk of Bankruptcy. Lower score is better. Income Insite Estimates the wage income of a member based on factors built by Experian models. Applicant Information The applicants SSN, Year of Birth, and current/previous addresses are listed here. Trades All trade-lines, or liabilities open or closed in the applicants name. Messages There are messages listed throughout the Credit Report. One section notifies if there are Military Lending Act (MLA) flags on the report. Once section covers any fraud notifications. Review Credit Report Verification First determine the accuracy of the credit report by comparing to the information the member provided. Including identification verification. Fraud Once you confirmed the accuracy of the members information, check for fraud alerts on the report. These should be located in the Messages sections on the report. If fraud is reported, contact Credit Solutions. Preliminary Credit Review Lending uses multiple factors to determine approval, but the credit score is most important. You can get an initial idea on where the application might fall on the rate sheet based on the credit score. Savings Opportunities Using the information provided under the Trades, you can determine if there is an opportunity for the member to save money by moving that loan to ACCU. This includes refinance, balance transfers, consolidation, etc. The report gives you a great opportunity to discuss different products that may benefit the member, aside from the loan they are currently applying for. Authorized Users Any negative performing authorized user tradeline will be excluded from all Experian generated risk scores (e.g., FICO). Authorized User trades with a positive status will continue to be available for scores. For more info on Authorized Users https://www.experian.com/blogs/ask- experian/what-is-credit-card-authorized-user/