How Opportunities Credit Union throws a lifeline to underwater borrowers
This Vermont cooperative is making life-changing auto loans to rescue borrowers who are underwater or burdened with high-interest debt of all kinds.
Is America’s auto loan debt getting out of hand? The $73,200 base price of the 2019 Lincoln Navigator kind of says it all.
With prices at the dealership on the rise, America’s outstanding auto loan debt reached $1.14 trillion in Q3 2018, up 63% from 2010, with the average monthly payment for new cars hitting $531.
These pricing pressures are fueling longer loan terms (68.8 months on average for new cars), and a growing number of borrowers are going underwater on their loans or moving to leasing contracts they can ill afford. To provide relief from crushing debt, Opportunities Credit Union ($40.3M, Winooski, VT) began offering its WOW Auto Loan in mid-2017.
Under the program, Opportunities members can borrow up to $30,000 for a 2010 or newer vehicle, with only 70% of the loan secured by the value of the vehicle. Opportunities will pay off the member’s old loan or lease residual, settle collections or other high-cost debt, including credit cards, and place up to $1,000 in a reserve account for unexpected repairs.
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