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Brokaw Credit Union

When It Comes to Car Loans, Shorter Is Often Better

A longer-term loan can make even the most expensive car look affordable.

By stretching out the loan over many years, your monthly payment is likely lower, but you could end up paying a lot more in interest. Still, many people find such loans attractive.

The average new car loan is now 67 months, according to Edmunds—the second-highest average term on record. Almost 25% of vehicle loans made in the second quarter of 2014 were for 73 to 84 months, according to Experian.

That's well above the standard three- to four-year loan that used to be typical for new car purchases. Here are some of the problems with taking out a longer car loan:

  • The longer the term of the loan, the worse your interest is likely to be. Shorter-term loans generally qualify shoppers for a better rate;
  • There's a greater chance you'll end up underwater. Without a substantial down payment, if you total the car or need to sell it, you could end up receiving less than you owe on the loan; and
  • You're stuck with the car even if you don't want it anymore. If you want to buy a different vehicle, you likely won't be able to trade in your car because of the difference between what you owe and what the dealer is willing to pay for it.

If you need a longer car loan just so you can afford to buy the car, that's probably a good sign that you can't afford the car in the first place. Strive to keep the length of your car loan shorter to save money, and visit Brokaw Credit Union for preapproval on a loan before you even begin shopping.

That way you know exactly how much you can afford, and you can avoid taking out a loan that's going to be a financial burden long after the new car smell has evaporated.

If you have an auto loan from another financial institution, BCU can help you refinance to a shorter term and still help you stay with an affordable payment.

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Brokaw Credit Union

What’s Your Credit Score? What Does It Mean?

The credit industry is keeping score. Every time you apply for a credit card, a mortgage, or even insurance, your application is judged in part by your credit score. That number is used by lenders to objectively measure your creditworthiness. The higher the score, the more likely you are perceived to repay credit.

Factors that affect your credit score include payment history, amount of debt you carry, length of credit history, whether you frequently apply for new credit, and your credit mix (credit cards, retail cards, mortgage, personal loans).

The best advice is to pay all bills on time and only charge as much as you can afford to pay in full when the bill is due on credit cards and other revolving accounts.

Consumers Union advises consumers not to purchase a credit score because it's often not the same as what many lenders use. You can order your credit report, on the other hand, for free. Visit to order one free credit report a year from each of the three credit reporting bureaus--Experian, Equifax, and TransUnion. At BCU, we can discuss your credit score in relation to your overall credit picture.

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Brokaw Office

300 Everest Ave
PO Box 151
Brokaw, WI 54417
Phone: 715-675-2319
Fax: 715-675-5511

Lobby Hours:
M, T, Th 9:00-4:00
Fri 9:00-5:30
Closed Wed and Sat

Drive-up Hours:
M, T, Th 8:30-4:30
Fri 8:30-5:30
Closed Wed and Sat

Weston Office

2006 Schofield Ave
PO Box 199
Weston, WI 54476
Phone: 715-359-7012
Fax: 715-355-5295

Lobby Hours:
8:30 am to 4:30 pm
8:30 am to 5:30 pm

Drive-up Hours:
7:30 am to 5:00 pm
Tues, Wed, Thurs
8:30 am to 5:00 pm
7:30 am to 5:30 pm
9:00 am to 12:00 noon

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