All your Car Loan Questions Answered

Car 4 min read

12 Nov 2019

Buying a car can be pretty exciting. Getting the finance in order to clinch the deal on the car is anything but. A credit union car loan however is a lot more stress-free and straightforward than other car finance options. We do all we can to keep our financial products as easy to understand as possible. And we never hide any pesky charges (or anything for that matter) in the fine print.

We love dealing with car loan applications at the credit union – and we get a lot of them. They are one of our most popular loans! So, we’ve decided to take the questions we’re most frequently asked about car loans and answer them below for you.

Have a question that we didn’t include? No problem, you can easily contact us here and we’ll be more than happy to chat to you.  


1. How do you apply for a car loan?

To apply for a car loan at the credit union, you must first be a member of the credit union. If you’re already a member but you haven’t used the credit union since boot-cut jeans were in fashion, worry not. You can still apply for a car loan even if your membership has lapsed. You can send a loan enquiry right now if you like, or simply contact your credit union.

If you’re not already a member, again no need to worry. Joining a credit union is pretty straightforward. Of course, you’ll need the usual documents such as proof of identity and proof of address etc. You can find the . And in the majority of credit unions, once you join you can apply for your car loan right away, no messing around!

2. What do you need for a car loan?

Your credit union loan officer will tell you exactly what you need, or you can call ahead or email to find out before you apply. Every credit union is independent so what you need might vary slightly from one to the other. As with any loan, you’ll need to demonstrate the ability to repay the loan. But don’t worry, the credit union won’t ask you for anything over and above what other financial institutions will ask you for. You can read more about applying for a credit union loan here.


3. Where is the best place to get a car loan?

Do you want your car loan to be affordable with flexible terms and conditions? Well you’d be a fool not to! That’s why you’re going to check out the car loans on offer from your local credit union. A credit union car loan is straightforward, with no hidden fees or charges. And a credit union loan officer will take the time to go through the terms and conditions in plain English with you. They may even make you a cuppa while they’re at it! Credit unions are pretty friendly places.  

There is also great flexibility with a credit union car loan. The loan officer will work with you to structure payments in a way that suits your lifestyle and income best. If you need to restructure those payments at any time, that won’t be an issue with the credit union. They will be happy to adapt the repayments schedule if your circumstances change. In addition, credit unions are ethical, not-for-profit financial institutions so you can rest safe in the knowledge that they have your best interests at heart at all times.

4. What are the best interest rates on car loans?

Credit union car loan rates are very competitive. The lowest interest rate that a credit union offered on car loans in 2018 was 4.90%. The average rate was 7.77%. As mentioned before, every credit union is independent so each one will set different interest rates for their car loans, depending on the demographic etc. of their membership. The best thing to do is to contact your local credit union who will come back to you with details on the interest rates they currently offer. Many credit unions also offer discounted or promotional at certain times of the year.

5. How does a credit union car loan work?

A credit union loan is in essence a credit agreement between you – the borrower – and your credit union. The difference with a credit union loan is that the money you are borrowing comes from a communal pool of money created by the savings of the credit union’s members. Any additional savings that are not lent out to members can be invested in the credit union. (From this income, the credit union pays any operational expenses. The remaining income can then be used to pay for dividends and/or loan interest rebates, plus other services for members).

A credit union loan is very flexible, in that you can restructure repayments as you wish. You also have the option to top-up the loan, or pay it off early without any financial penalty. More on this in question 10.


6. How easy is it to get approved for a car loan?  

Our latest statistics show that 95.5% of credit union loans are approved*. We will do all we can to approve a car loan application, provided the borrower can demonstrate ability to repay the loan (more information on this in the next question). There may be circumstances in which a credit union may not be able to approve the full amount applied for. If this happens, generally your credit union loan officer will do all they can to approve a loan amount as close to your original application as possible.


7. What do credit unions look at when applying for a car loan?

The key deciding factor in you getting your car loan is your ability to repay. So, your credit union loan officer may ask for some financial information. The information you need to supply may vary slightly from one credit union to another, as each one is independent and sets their own terms and conditions. The best thing to do is pop a quick enquiry to your local credit union and they’ll be back to you with the full information.

If you don’t have a regular income, because you are a student or in between jobs etc., a credit union may ask for a guarantor. More on that in question 11 below. And if you are in receipt of social welfare, you can borrow up to €2,000 through the Personal Micro-Finance scheme which is offered by

8. How big a car loan can I get?

Credit unions offer much bigger loans than you might think. So whatever car you’re planning on buying, your credit union should have the loan to match. Key to the lending decision will of course be your ability to repay the loan.


9. What is the maximum term for a car loan?

Credit union car loans are very flexible and your credit union loan officer will work with you to structure the loan repayments for as long or as short a term as suits you. Should you find that you need to reduce your repayments and increase the term of the loan, that won’t be a problem and the credit union will work with you to make that happen. Likewise, you can reduce the term of the loan and increase the payments if you prefer. More on that in the next point.


10. Can you pay off a car loan early?

In a word, yes! You can pay off a credit union car loan early and there will never be any financial penalty for doing this! This is not the same with other car finance options, such as PCP agreements which are far more inflexible in this regard.


11. How do you get your first car loan?  

As with any loan, the key deciding factor will be your ability to repay. If you are a student and applying for a car loan, we understand that you might not have a regular income. So, a credit union might require a guarantor. A guarantor is generally your parent/guardian (although it can be someone else). Your guarantor undertakes to repay the loan in the event that you are unable to repay.

For a person is to act as a guarantor, they must themselves demonstrate ability to repay the loan. Guarantors will be required to complete an application form where they will need to disclose their financial information and agree to a credit check being carried out. 


12. Can you add a car loan to a mortgage?

If you have a mortgage with your credit union, your loan officer will simply look at your ability to repay your car loan taking your mortgage repayments into consideration.

If you have a mortgage with your bank, there is no reason why you can’t get a car loan from the credit union – provided you can demonstrate your ability to repay etc. In addition, the credit union is obliged by law to consult the Central Credit Register and check your mortgage repayments etc. Once these checks have been carried out and the credit union is satisfied of your ability to repay, your loan application should be well on the way to being approved!
For more specific information on the car loans at your local credit union, simply hit the button below.

 Submit an Online Loan Enquiry

*ILCU Marketing and Lending Survey 2019, refers to standard loan applications which were completed in full.