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PSECU Auto Loan Review

Choosing the best auto loan for you takes time and research.

Pennsylvania residents (and others) can consider joining the Pennsylvania State Employees Credit Union, or PSECU, which provides auto loans to its members. The application process is quick and straightforward, and you could have an answer in minutes.

If you aren’t a member, it’s easy to join. In this review, we’ll break down what you need to know about PSECU’s auto loans.

About PSECU and its auto loans

The PSECU was established in 1934. A group of 22 state employees were struggling financially during the Great Depression and were unable to secure loans at reasonable rates. They pooled their money to form the credit union.

PSECU offers new and used car loans, business vehicle loans and recreational vehicle loans. It also offers refinancing and lease buyouts. Only PSECU members are eligible for its auto loans (we’ll discuss membership later).

PSECU auto loans: At a glance

APRs and terms

  • New or used auto loans: Starting APRs from 2.49% to 8.74% and up for 1 month to 120 months
  • Refinance auto loans: Starting APRs from 2.49% to 8.74% and up for 1 month to 120 months
  • Lease buyout loans: Starting APRs from 2.49% to 8.74% and up for 1 month to 120 months

Note that all APRs include a 0.25% reduction for autopay. Here is a further breakdown of its offerings based on your loan term:

Loan Term New or Used Auto Loans APR Refinance Auto Loans APR Lease Buyout Loans APR
1-36 months Starting at 2.49% Starting at 2.49% Starting at 2.49%
37-60 months Starting at 3.49% Starting at 3.49% Starting at 3.49%
61-84 months Starting at 3.99% Starting at 3.99% Starting at 3.49%
85-120 months Starting at 8.74% Starting at 8.74% Starting at 8.74%

Loan amounts

  • New auto loans: PSECU will finance up to 100% of the manufacturer’s suggested retail price (MSRP).
  • Used auto loans: PSECU will finance up to the retail value of a car or truck worth at least $3,000. Retail value is based on the Kelley Blue Book value or an alternative authorized pricing guide.

To get a 120-month term on any of PSECU’s loans, the vehicle must have a value of at least $40,000 — and you need to finance a minimum of $40,000. There are no other minimum loan amounts, though there are minimum values.

Minimum values and loan amounts for new or used car loans, refinance car loans and lease buyout loans are as follows:

Vehicle Minimum Value Minimum Loan Amount Maximum Term
New or used $40,000 $40,000 120 months
New or used $20,000 N/A 84 months
New or used $12,000 N/A 72 months
New or used $8,000 N/A 60 months
New or used $6,000 N/A 48 months
New or used $3,000 N/A 36 months

 

For example, if your new or used vehicle is valued at $7,000, you can only seek a term shorter than 60 months.

Loan requirements

Membership

As a reminder, you need to be a PSECU member to qualify for any of its auto loans.

To be a member, you must be employed by:

  • State or local government
  • School district
  • Municipality

You may also become a member if you:

  • Work for a company that offers PSECU membership.
  • Have a relative or reside with someone who is a member.
  • Attend, work for or graduated from a Pennsylvania college or university that has a relationship with PSECU.

If you don’t meet these criteria, you can join the Pennsylvania Recreation and Park Society for $20. Not only will this membership make you eligible to join the credit union, but PSECU will cover $10 of your dues. You do not need to renew your membership to remain a PSECU member.

You do not need to be a state resident to become a member of PSECU if you join through the society membership. Once you join PSECU, you remain a member even if you change jobs or relocate to another state.

Credit history

PSECU considers your credit history when setting your APR and how much you can borrow.

A buyer with a high credit score would likely get a lower APR and more favorable repayment terms. A buyer with limited credit history may need a cosigner on their auto loan.

Other types of loans

RV loans

PSECU also offers loans for recreational vehicles (RVs). These loans can also cover campers, motor homes and trailers.

APRs range from 5.25% to 7.00% and up with terms of one to 120 months.

RVs can be financed for up to 90% of their retail value, which is based on:

  • MSRP for new RVs
  • Kelley Blue Book or an alternative guide for used RVs

The minimum value for an RV loan is $3,333 (90% equates to the $3,000 minimum loan amount).

Business vehicle loans

Any PSECU member who operates a business in Pennsylvania is eligible to finance a vehicle. PSECU will extend an auto loan for new and used business or commercial vehicles that are not part of a fleet.

APRs range from 2.74% to 4.24% and up for sole proprietorships or 3.74% to 6.24% and up for general partnerships, limited partnerships, corporations and limited liability companies. Terms range from one to 84 months.

Vehicles must have a minimum value of $3,000. Here is a closer look at financing:

  • New business vehicles: Up to 100% of MSRP.
  • Used business vehicles: Up to 100% of the value set by Kelley Blue Book or another authorized pricing guide.
  • Untitled new business vehicles from the prior year: Up to 100% of the value set by Kelley Blue Book or another authorized guide if the vehicle was purchased before April 1 of the current year.

Note that PSECU does not extend loans for the purchase of motorcycles, boats or other leisure or sports vehicles. Consider applying for a personal loan.

How to apply for financing

Auto loan

You can apply online for a PSECU vehicle loan. First, you need to determine how much you can afford to pay each month for a loan payment.

To begin the application process, you should gather the information you need to apply for a loan. If you have a joint applicant, you will need to obtain these documents for both of you.

Information you (and possibly your joint applicant) need includes:

  • Current mailing address
  • Social Security number or tax identification number
  • Valid photo identification such as a driver’s license or passport
  • Gross monthly — and annual — income and its source
  • Current debt payments
  • How much money you would like to finance
  • VIN and price if available
  • Copy of window sticker if available

Complete your loan application online or over the phone by calling 800-562-6555.

You will often receive a preapproval decision minutes after submitting your online application, but usually on the same business day.

If you’ve been approved, you can pick a car. PSECU will mail you an AutoDraft — valid for 120 days — that you can use to pay for the car. An AutoDraft is similar to a check for the approved amount that can be used at an authorized dealer. If you are buying a car from a private seller, you will receive an AutoCheck made out to the seller for the exact amount.

You can also follow the steps above if you are interested in finding out the loan amount for which you may qualify. Preapprovals are valid for 60 days.

Refinance loan

Members looking to refinance an existing auto loan can do so by:

  • Gathering the same information as above, as well as information on your current vehicle and a 10-day payoff amount.
  • Completing your loan application online or over the phone by calling 800-562-6555.

If you are approved, PSECU will advise you on how to pay off your current loan.

Lease buyout loan

Members looking to buy out their current lease should:

  • Contact the current leaseholder to determine the amount needed to buy out the lease.
  • Gather the same information as needed if you were applying for an auto loan, as well as information on your current vehicle and the lease buyout amount.
  • Complete your loan application online or over the phone by calling 800-562-6555.

If you are approved, PSECU will send you an AutoCheck and transfer the title to its name until you’ve paid off the loan.

The fine print

Be sure to thoroughly read and understand the terms of any loan agreement before you sign it.

  • If you don’t set up or if you discontinue autopay on your PSECU auto loan, your rate will increase by 0.25% APR.
  • If you are approved to finance more than 100% and up to 120% of the retail value, PSECU will charge an additional 2% interest.
  • If you are approved to finance between more than 120% and up to 130% of the retail value, PSECU will charge an additional 3% interest.

Pros and cons of financing through PSECU

Highlights of PSECU auto loans

  • Fast and easy application process
  • No down payment is required
  • No application fee
  • PSECU Member Showroom where buyers can browse vehicles at approved dealerships

Lowlights of PSECU auto loans

  • You must be or become a member of PSECU
  • If you have limited credit or weak history, you may need a cosigner
  • PSECU adds $1,000 to your new loan if you are refinancing an existing PSECU loan; this does not apply when you refinance non-PSECU loans.

The bottom line: Who is PSECU best for?

PSECU can assist buyers searching for the best rates on vehicle loans. If you are not a member — or do not plan on becoming a member — of PSECU, you would need to look elsewhere.

 

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