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February 1, 2024How to Calculate the True Cost of Borrowing

Borrowing money is a decision that requires careful consideration. Whether it's for a home, education, or unexpected expenses, understanding the true cost of borrowing is essential to make informed financial choices. At 1st Community Credit Union, we believe in empowering our members with the knowledge needed to navigate borrowing responsibly. Let’s explore how to calculate the true cost of borrowing and discuss the impact that it can have on your credit.

a person sits and sifts through tax forms and documents
Understanding Interest Rates:
One of the primary factors influencing the cost of borrowing is the interest rate. Whether you're considering a loan from a bank or a credit union like 1st Community Credit Union, the interest rate determines the additional amount you'll pay on top of the borrowed sum.

Credit unions often offer competitive interest rates compared to traditional banks, making them an attractive option for borrowers. When evaluating the true cost of borrowing, consider not only the interest rate but also whether it is fixed or variable. A fixed rate provides stability with consistent monthly payments, while a variable rate may change over time, affecting your overall repayment amount.

Loan Terms and Repayment Plans:
The length of your loan, known as the loan term, is another crucial factor in calculating the true cost of borrowing. While longer terms may result in lower monthly payments, they often lead to higher overall interest payments. Shorter terms, on the other hand, may have higher monthly payments but can save you money in interest over the life of the loan.

At 1st Community Credit Union, we can tailor loan terms and repayment plans that align with your financial goals. Understanding the trade-offs between monthly affordability and long-term interest savings is vital for making an informed borrowing decision.

Impact on Credit:
Borrowing money, when managed responsibly, can positively impact your credit score. Timely payments and responsible credit usage demonstrate to credit bureaus that you are a reliable borrower. On the flip side, missed payments or accumulating too much debt can have a negative effect on your credit score.

At 1st Community Credit Union, we work closely with members to find solutions that suit their financial situation. Responsible borrowing and on-time repayments contribute to building a positive credit history, opening doors to better financial opportunities in the future.

As you embark on the journey of borrowing money, understanding the true cost is paramount to making sound financial decisions. At 1st Community Credit Union, we are committed to providing our members with the tools and knowledge they need to navigate the borrowing process wisely.
Consider the interest rates, loan terms, and overall impact on your credit when evaluating borrowing options. Our team at 1st Community Credit Union is here to assist you in making informed decisions that align with your financial goals. Contact us today to explore personalized borrowing solutions and embark on a path of financial empowerment.

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November 30, 2023New Year, New Car? Here's What You Need to Know

Auto Loans: Your Path to a New Car

Are you considering getting behind the wheel of a new car in the upcoming year? The start of a new year often brings fresh beginnings and a list of exciting possibilities. If a new car is on your wish list for the year ahead, it's essential to be well-informed about auto loans and the process of financing a new car.

A line of new cars shien in the lights of dealership, hinting at the ease of financing with the help of auto loans.

Determine Your Budget: Before you start browsing the latest car models and dreaming about your new ride, take a realistic look at your financial situation. Calculate your monthly income, expenses, and savings. This will help you establish a budget for your new car, ensuring that you don't overextend your finances.

Check Your Credit Score: Your credit score plays a crucial role in the auto loan approval process. Lenders use your credit score to assess your creditworthiness and determine the interest rate you'll be offered. The higher your credit score, the better the terms you can secure. If your credit score needs improvement, consider taking steps to boost it before applying for a loan.

Shop Around for the Best Loan Rates: Don't settle for the first loan offer that comes your way. Shop around and compare auto loan rates from different lenders, including banks, credit unions, and online lenders. By doing so, you can find the best deal that suits your budget and financial goals.

Understand Loan Terms: When evaluating loan offers, pay attention to the loan terms. These terms include the interest rate, loan duration, and monthly payments. A longer loan term may result in lower monthly payments but can end up costing you more in interest over time. Be sure to choose terms that align with your budget and financial objectives.

Down Payment and Trade-In: Consider making a substantial down payment and possibly trading in your current vehicle. A larger down payment can reduce the loan amount, leading to lower monthly payments and less interest paid over the life of the loan. Similarly, trading in your old car can provide additional funds to put toward your new vehicle.

Pre-Qualified Benefits: Getting pre-qualified for an auto loan is a wise step. It not only gives you a clear idea of your budget but also makes you a more attractive buyer to dealerships. Pre-qualification can help streamline the car-buying process and potentially lead to better negotiation opportunities.

Read the Fine Print: Before signing any loan agreement, carefully read and understand all the terms and conditions. Make sure there are no hidden fees or surprises down the road. If you have any questions or concerns, don't hesitate to ask the lender for clarification.

Consider Insurance Costs: Don't forget to factor in the cost of insurance for your new car when budgeting. Insurance premiums can vary depending on the make and model of the vehicle, so it's essential to get quotes and ensure it fits within your budget.

Plan for Ongoing Maintenance: Owning a new car involves ongoing expenses such as fuel, maintenance, and registration. Make sure you have a plan in place to cover these costs in addition to your monthly loan payments.

Drive Off with Confidence: Once you've secured your auto loan, negotiated the price of your new car, and finalized the deal, you can drive off into the new year knowing that you've made an informed and responsible decision.

Shop Smart

A new year brings new opportunities, and if a new car is on your horizon, it's crucial to be well-prepared when it comes to financing. By understanding the ins and outs of auto loans, managing your budget, and making informed choices, you can drive into the new year with a fresh set of wheels, making 2024 a year to remember. At 1st Community Credit Union, we offer a wide range of loan rates and opportunities. When it comes to finding the car of your dreams, check out 1st Community Credit Union’s AutoSmart website to help you shop smart this year!

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February 1, 2023Managing Debt and Borrowing Responsibly

For many people, managing debt and borrowing responsibly is a part of making a household budget balance out. When used properly, credit and loans can be excellent tools to help you get the major purchases you need or acquire an investment in assets such as education or real estate. There are various types of debt and they won’t always result in the same outcome. The kind of debt that does not invest in anything can be both a short and long term burden.

No matter how much or what type of debt you take on, you need a plan to pay it back. The quicker you pay it off, the less you’ll end up paying on compounding interest. A bit later on, we’ll take a look at proven payment strategies.

Responsible Borrowing

It is important to practice responsible borrowing when taking out loans. Unless you have the financial resources to pay off a loan right away, make sure that you understand all of the terms before signing a contract. Auto loans, car loans, and home loan mortgages are some of the most common types of borrowing. It is important to assess your financial situation before taking out an auto loan or car loan to make sure that you can afford the payments over time.

toy house, stacks of coins, and bags marked with a dollar sign

Home Mortgage Loans

When taking out a home mortgage loan, it is essential to understand the long-term implications of the loan. Home mortgage loans generally come with higher interest rates than other types of loans, and may span over many years. To ensure that you are borrowing responsibly, make sure that you have a full understanding of all associated costs before signing any contracts.

Understanding The Costs

Good credit and debt management is incredibly important in taking out loans. A good credit score and healthy debt-to-income ratios will allow you to access better loan terms, including lower interest rates and potentially more favorable repayment options. Before taking out any type of loan, make sure that you are confident that you can afford the payments over time and understand all of the associated costs. Borrowing responsibly is the key to successful loan management.

Proven Payment Strategies

Though your debts may be different from your neighbors, there are two proven ways to manage your loans. Before choosing a method, consider your financial situation. For maximum effectiveness, it’s best to stick with a method once you start.

-Debt Snowball

This method prioritizes each of your debts by size. First make the minimum monthly payment on all of your debts, then use any remaining money to pay off the smallest balance first. Continue paying as much as your budget allows month after month until that debt is paid off. Once your smallest balance is paid off, apply that payment amount to the next smallest loan in addition to the minimum monthly payment until that too is paid off. As each debt gets down to zero, your payment snowball increases, and you get out of debt faster. Continue this until you’re debt free.

-Debt Avalanche

Similar to the debt snowball method, this plan focuses on the debt with the highest interest rate. Make your minimum monthly payment of each balance and throw every dollar you can at the balance with the highest interest rate. Once you’ve paid that off, jump to the next highest interest rate, continuing the process until you’re debt free. You’ll pay off debt more quickly and reduce overall interest rates.

Remember, borrowing money should always be an informed decision. Knowing your financial situation and understanding all of the terms of a loan are essential to responsible borrowing. With good credit and debt management, you can ensure that any loans taken out will be manageable and beneficial in the long-term.

If you have questions about borrowing responsibly, credit or debt management, it’s best to speak to an experienced and qualified financial advisor, like the people at 1st Community Credit Union in Sparta, West Salem and Tomah. Together we can set you on a path to safely utilize financial tools, like home mortgage loans and auto loans. Just contact us! Let 1st CCU be your partner in responsible borrowing.

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October 1, 2022Understanding Your Free Credit Report

Regularly checking on your credit history is essential to understanding your current financial health. It provides insights into how well you manage your debt and is a great way to know if you’re in a good position to borrow money. In addition, it also alerts you to fraud and helps you detect inaccurate information on your account.

Lenders may accept or deny your loan applications based on the information provided in your credit report and their own criteria. That’s why before you make big financial decisions like buying a house or a car, it is beneficial to obtain this free document.

How To Get a Free Credit Report

There are three major credit reporting bureaus in the United States: Equifax, Experian, and TransUnion. Fortunately, you are entitled to a free annual report from each of these agencies. The easiest way to request a copy is to visit AnnualCreditReport.com. You may also call (877) 322-8228 or download and complete the request form online before mailing it to:

Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281

If you wish to obtain all three reports at once, you can order each document separately. By doing this, you can better monitor your credit scores and history throughout the year. Once your free annual report from each agency is used up, they might charge up to $13.50 for subsequent requests.

hand holding pen and filling out credit report info

What To Look For When You Receive Your Credit Report

The information contained in your credit report will help lenders determine whether to extend credit to you or not. Regularly monitoring your credit report status can improve your chances for loan approvals. However, with so many details listed in a single document, it can be overwhelming to review each of them. Here are some of the key points you should pay close attention to when inspecting your credit report:

Personal Information

Check if your credit report has an incorrect or incomplete name, address, or phone number. Multiple birth dates, the wrong social security number, and inaccurate employment information are also considered errors.


This section comprises information on all of your credit accounts, such as credit cards, auto loans, and mortgages. Unrecognized accounts, inaccurate status of accounts, and incorrect credit limits are all bad news and should be verified.

Public Records

Lenders and other third parties will also inspect your public records for financial transactions like bankruptcies, foreclosures, and tax liens.


Reviewing your credit report will also help you detect if a company pulled your report without your permission or knowledge. This may mean that a fraudster applied for an account in your name.

Entrust Your Finances to Us

If you need help requesting a credit report, turn to us at 1st Community Credit Union. We take pride in delivering friendly and personalized service to our members. Contact us to get started on your journey to achieving financial independence.

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February 1, 2022How to Buy Your Next Car When Inventory is Low

Recently, the market has shown low numbers of new and used vehicles available for sale. This can be attributed to low-interest rates, consumers running on stimulus and tax refund money, and the pandemic’s uncertainty with supply chains, among other factors. If you are planning to shop for a new set of wheels, doing so can be a lot more challenging than usual. You might not find the car you want in your local dealership.

In addition, car prices are on the rise due to the downward trend of inventory numbers. To help you find the right vehicle, 1st Community Credit Union introduces AutoSMART.

hand pointing key fob at car

What Is AutoSMART?

Although you may not find the car you want at your local dealership, the good news is that you can find and purchase at other stores through your computer or phone. AutoSMART offers a convenient way to help you find your next set of wheels. With this tool, you can search dealership inventories all over the country in the comfort of your home. This means you no longer have to drive to multiple car lots to look for a suitable auto.

How Does It Work?

With AutoSMART, finding the right car can be as easy as entering your zip code and selecting the type of vehicle you’re looking for. You can narrow down your choices by mileage, year, and price range using the tool’s search filters.

If you can’t see the automobile you want within 5 miles of your zip code, move the slider bar to widen to a full nationwide search. After that, you can sit back and browse the current inventory that matches your vehicle preference. Once you find a car you’re interested in and need more information on it, simply click the “Contact” button to send a message to the dealership where it is offered.  

AutoSMART will also help estimate your monthly payments. You can also get your financing approved through this tool, so everything is taken care of when you walk on to the car lot to drive your new vehicle home.

Financing With 1st Community Credit Union

Purchasing a vehicle used to be an all-day activity. It’s a tedious process that starts with driving to your auto dealer, selecting a car you want, haggling over the price, and filling out a lot of paperwork. Then, you have to go back and forth between your dealer and credit union with your payment in hand.

To avoid that, 1st Community Credit Union and Credit Union Direct Lending (CUDL) collaborated to bring AutoSMART to improve your auto-buying experience. We made financing a car so much easier. You just have to decide on the make and model of the vehicle you want through the AutoSMART website. After that, simply visit the participating dealership where the vehicle is located.

Once you’re there, apply for 1st Community Credit Union’s low-rate auto financing through the CUDL system. You can get approved on the spot without needing to visit your credit union branch. All the paperwork is taken care of electronically, so all you have to do is drive your new car off the lot.

Drive Home Your Dream Car Today

If you’re planning to buy a car without all the hassle and stress that comes with the auto-buying experience, call us at 1st Community Credit Union in Wisconsin. Through our easy auto financing program, you can avoid the typical hassle of car buying and save that time for enjoying your new ride.

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October 1, 2021Should You Refinance Your Car Loan?

Are you dissatisfied with your current car loan? Perhaps it is time to talk with lending experts and start refinancing your car. The concept behind auto loan refinancing is straightforward: you take out a new loan to pay down the balance on your old one.

set of keys and hands filling out application

If you have trouble paying your bills because of an extremely high interest rate or monthly payment, refinancing may be the answer. Continue reading to decide if now is the right time to refinance your auto or recreational vehicle loan with 1st Community Credit Union.

If You Can Find a Better Interest Rate and Lower Monthly Payment

You should consider refinancing your car loan if you can find a deal that will reduce your interest rate. If you had no credit or low credit before, it is worth looking into refinancing your auto loan after a few years to see if you can get a better deal. Your credit score may have improved to the point where you are now eligible for a lower interest rate.

With a lower interest rate, you will be able to pay off your loan faster or lower your monthly payment while keeping the same repayment schedule. In either case, you’ll pay less over the loan’s life.

When Your Credit Score Has Improved

Like other loans in the markets, your credit score is also crucial when applying for a car loan. That is because auto lenders sort applicants by credit categories. If your credit ratings have improved since you purchased your last vehicle and you have made on-time monthly payments, you may qualify for a lower interest rate. Hence, a lower interest rate will save you money over the life of your loan.

Better credit scores can help lenders determine if you could pay off your loan. If so, they may offer you a lower rate. Having an improved credit score would be the perfect time to refinance your car loan.

When You Want To Extend the Auto Loan Term

An expensive event, such as having a baby, unanticipated medical bills, or a natural disaster, can force you to cut your regular expenses. For these reasons, you may choose to refinance your car and prolong the term of your loan.

Extending your loan term also means having a cheaper payment. Take note that your monthly payment is reduced when extending the length of your auto loan, but it also raises the amount of interest you’ll pay over time. It also works the other way around. So, if you shorten the period, your monthly payment will increase while your overall interest payment will decrease.

Contact Us for More Information About Car Refinancing

If you have more questions about refinancing your car loan, our local lending experts at 1st Community Credit Union in Wisconsin will be happy to assist you. We loan options that fit your budget. Apply now to get started!

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September 1, 2021Strategies To Pay Off Student Loans Fast

Although everyone deserves a good education, most people don’t have the means to pay for it. That’s why they usually get a student loan to afford to enroll in a good college and pursue their studies. However, it could be a challenge to pay off student loans while managing your living expenses and saving for the future.

Student Loan Application and calculator

If you’re feeling overwhelmed by your expenses, here are a few tips you can follow to pay off your student loans faster and ease some burden off your shoulders:

Make Extra Payments the Right Way

One of the best ways to cut your total payoff time is to make larger payments. This will reduce the principal balance, shorten your loan period, and minimize the interest you have to pay. You can also make additional payments at any point in a month or every two weeks rather than waiting for the due date.

Just don’t forget to advise your service provider to apply the overpayments to your principal balance. Otherwise, you’re just advancing the due date and not paying off your loan faster.

Refinance if You Have Good Credit

If paying off student loans quickly seems impossible, you might be paying too much interest. To avoid this, consider refinancing multiple loans and replacing them with a single private loan with a lower interest rate. You can speed up the repayment by choosing a loan period that’s less than the remaining time of your current loans.

Opting for a shorter term will help you pay the debt quicker and save money on interest. However, it can increase your monthly payment.

Get a Part-Time Job While Attending College

One way to make sure you can get a head start on paying your loan is to have income. While attending college, try applying for a part-time job, so you can use your earnings to reduce your balance. However, you have to consider if you can properly manage your studies while working.

Follow a Budget

Being disciplined with your finances can help you pay off your student loan faster. If you understand your monthly cash flow and plan your expenses accordingly, you can prevent delays in reducing your principal balance. Make sure you’re diligent about sticking to a budget throughout your entire repayment period.

Stick to the Standard Repayment Plan

Although making additional payments is one of the best ways to shorten your loan period, some people cannot do it because of their financial situation. If you’re in a similar predicament, the fastest way to pay off your student loan is to follow the standard repayment plan.

Check for Interest Discounts

You’ll find that many people are struggling to pay off their student loans because of high-interest rates. Fortunately, some lenders can offer 0.25% to 0.5% discounts if you sign up for automatic payments on your loan. Other service providers may also offer discounts if you meet a certain number of on-time payments or if you apply for another loan with their company.

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August 1, 2021Auto Loans: How Much Car Can You Afford?

Planning to buy a new car or a used car is a big decision as it affects your monthly budget and financial situation.  Purchasing a car might be one of your major financial commitments, needing you to figure out how it fits within your budget and whether it is affordable.   Your budget dictates the price tag to the vehicle you can afford and not necessarily the car you want.

To illustrate, you want to buy a vehicle that costs $40,000/- but your income can only afford a car worth $25,000.  Therefore, the car you want is not within your reach, thus, forcing you to reconsider your planned purchase.  Non-payment of auto loan leads to your financier repossessing your vehicle. How can you calculate the amount you can afford to purchase your car?

man holding car keys next to car

1.  Calculate Your Monthly Net Income

Financial advisers typically advise you to spend less than 10% to 15% of your monthly take-home income on your car loan payment.  That means that your first step is to calculate your monthly net income against your monthly expenses.  Doing so will help you determine how much extra income you can dedicate towards auto loan repayments and transport costs.  Transport costs include fuel expenses, car service maintenance and repairs, and car insurance.

So, if your monthly net income is $4,000, plan to spend $400 on your car payment.

2.  Check Your Credit Score

Your credit score contributes to determining your annual percentage rate (APR) payment on the auto loan.  The higher your score, the less you pay for loan interests.  Keep in mind that the interest rates for pre-owned vehicles are higher than interest rates for new cars.   Be realistic about the length of time you wish to pay off your auto loan.

According to CNET, buyers in America negotiated to repay their car loans over long periods to make cheaper monthly payments. In March 2020, auto loan repayment periods were approximately 72 to 80 months of financing for new vehicles.

Negotiating for a longer-term repayment schedule reduces your monthly payments.  However, the final amount of interest paid for your car increases.

3.  Establish your Target Price

Once you have determined the amount of auto loan you can afford, set your target price for purchasing a vehicle.  It is essential to factor in 10% for the sales taxes and fees.  For example, your target price for buying a car is $ 25,000.  At the dealer's, you see a car with the advertised price tag of $25,000.  Calculate the cost of the vehicle to include an additional 10% to the advertised price to get the total purchasing price of $27,500, which stands above the price you can afford.  Therefore, target a car whose price is approximately $22,500.

4.  Make a Down Payment from Your Surplus Income

Make a down payment on your auto loan as it reduces the length of time to pay off the loan.  You can use a trade-in as a down payment if you paid off your old car or you have equity.

For more financial advice for auto loans, contact 1st Community Credit Union or give us a call at 888-706-1228.

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