DCU Auto Purchase, Refinance and Lease Buyout Loans: 2024 Review

Full Review of Digital Federal Credit Union

Digital Federal Credit Union, also known as DCU, offers new and used car purchase loans, refinance loans and lease buyout loans. Credit union membership is required to finalize and fund a vehicle loan, but individuals can submit a loan application and join DCU after receiving their loan decision. There are many ways to become eligible for DCU membership, like being an employee of a DCU participating company or belonging to a DCU participating organization. New members are required to open and maintain a primary savings account with a minimum $5 balance. This account can be opened and funded online.

Auto loan rates on the DCU website reflect rates available to borrowers with excellent credit and a 0.5 percentage point discount. To qualify for this discount, members must set up direct deposit to a DCU checking account of at least $500 per month and maintain electronic loan payments. An additional rate reduction of 0.25 percentage point is available for fully electric vehicles.

Unlike many credit unions, DCU focuses more on direct lending to consumers than providing loans through car dealerships. This means that you can get funding through the credit union, then purchase a vehicle from the dealership of your choice. DCU does provide financing for cars purchased through online used car retailer Carvana.

Note: DCU also finances vehicles purchased from private parties and offers cash-out refinancing as well.

Table of contents

Digital Federal Credit Union at a glance

Digital Federal Credit Union may be a good fit for those who ...

Do you qualify for a Digital Federal Credit Union auto loan?

How to apply for a Digital Federal Credit Union auto loan

How auto loan rates work and how we collect them

How do we review auto loan direct lenders?

DCU at a glance

• Restrictions

  • New vehicle definition: Not older than the current calendar year, minus one.

  • Maximum vehicle age: 20 years or newer. (DCU will finance 20+ year old vehicles but they are subject to higher rates and other restrictions.)

  • Maximum vehicle mileage: No maximum.

  • Other vehicle restrictions: None. Vehicle can be purchased from a franchised dealer, independent dealer, online retailer or private party.

  • Loan amount minimum: None.

  • Loan amount maximum: $500,000.

  • Maximum loan-to-value ratio: 135%.

  • Refinance time restrictions: Borrowers can refinance as soon as the previous loan's paperwork is complete and the title can be transferred.

  • Bankruptcy restrictions: No bankruptcies within 24 months before application.

• Other loan details

  • Approval speed: Immediate in most cases. Approved loan offer is good for 45 days.

  • Initial deferred payment: Up to 60 days.

  • Existing loan payoff: For refinancing and lease buyout loans, funds can only be mailed to the lender by check.

  • Selected payment due date: Borrower can select their payment due date prior to signing the loan agreement.

  • Late payment grace period and fee: Grace period of 10 or more days. Charges late payment fee of $5.

  • Hardship plans: Yes. It may include deferred payments and an extended loan term.

• More lender details

  • Contact options: Phone, email, live chat, visit a location. DCU provides Spanish-speaking agents by phone.

  • Availability: A consumer loan call center with DCU representatives is available 24/7 to assist with loan applications and answer servicing-related questions for members who have loans.

  • Mobile app to manage account: Yes.

  • Online resources: Offers an online content center with articles covering personal finance topics. DCU also offers an online auto loan calculator to help consumers estimate their monthly loan payments.

  • Related services: DCU offers financing for cars purchased through online used car retailer Carvana.

  • Membership Eligibility can be by family membership, working at or retiring from certain companies or belonging to or joining a designated nonprofit organization. Those who live, work, worship or attend school in certain Massachusetts communities are also eligible. Eligibility guidelines are on the DCU website.

DCU may be a good fit for those who:

• Need a more flexible lender. For auto loans, DCU has no minimum requirement for credit history or income.

• Want the benefits of credit union membership. Borrowers who open or have a DCU checking account, add direct deposit of $500 per month and make their loan payments electronically will receive a rate discount on auto and other consumer loans. Accounts and loans can be managed through DCU’s online and mobile banking, including submitting future pre-filled loan applications.

• Want to see potential savings from refinancing. In most cases, borrowers can quickly see how much they might save by refinancing their current auto loan through DCU. Using the online refinancing application, applicants can input their cell phone number, verify their phone number with a code, input the last four digits of their Social Security number, then have the application pre-fill including their existing vehicle and loan information. Within minutes, they’d see their loan offer.

Do you qualify for a DCU auto loan?

Here are DCU's basic eligibility requirements to apply for an auto loan:

• You must have a valid Social Security number.

Here are DCU's minimum borrower requirements to qualify for an auto loan. Note that meeting these requirements doesn’t guarantee approval. Also, many lenders are flexible with minimum requirements when considering an applicant's total financial picture.

• Minimum credit score: 600.

• Minimum credit history: None.

• Maximum debt-to-income ratio: 65%.

• Minimum annual income: None.

Before you apply

Check your credit. You can get your free credit report on NerdWallet or at AnnualCreditReport.com. If you find errors, file a credit dispute to correct them before you apply for an auto loan.

Figure what monthly payment you can afford. For purchase loans, use an auto loan calculator to determine what APR and repayment term you need to get monthly car payments that fit your budget. When you know your maximum car payment, a car affordability calculator can help you determine a realistic car price. For auto refinance loans, use an auto refinance calculator to see your monthly payment and determine what APR and term you need to make refinancing worthwhile.

Gather your documents. DCU requires the following to submit an initial application: Social Security number or ITIN, address, time at address, phone, email, birthdate, employment status, employer name, income, housing status, housing payment amount, driver's license number, basic vehicle information and vehicle identification number (VIN).

» MORE: Compare auto loans, rates and lenders

How to apply for a DCU auto loan

1. Submit your auto loan application. Applicants can apply for a DCU loan online, at a physical location, or by phone at 800-328-8797. DCU has two different online auto loan applications, one is accessible from the main DCU auto loans page and one from its auto refinance loans page:

   • The origination loan application: DCU’s online application from its main auto loans page requires the manual input of information. It does not offer rate estimates with a soft credit inquiry, and submitting it does result in a hard credit inquiry. Usually, an approval decision is provided within minutes.

   • The auto refinance application: The application specifically for auto loan refinancing provides pre-qualification with instant rate and payment estimates using a soft credit inquiry. A hard credit inquiry is done only after an applicant proceeds with the loan. Applicants can input their cell phone number to receive a verification code by text. Upon entering this code as well as the last four digits of your Social Security, some of your personal information — address and phone number — will automatically populate the auto refinance application. You’ll then be prompted to enter your existing vehicle and loan information.

2. Stay on top of your loan payments. DCU reports car payments to all three major credit bureaus, so on-time payments will help build your credit score, but missed payments will hurt it. If you can, set up automatic payments to make sure your payments arrive by the due date.

» MORE: Compare auto loan refinancing lenders

How auto loan rates work and how we collect them

The auto loan APR range NerdWallet displays is provided by the lender. We make every attempt to keep rates updated, by sending out bimonthly rate surveys and encouraging lenders to send us updates when rates change. We also compare these rates to APRs on the lender's website, if available. The accuracy of our rates depends on the information lenders provide to us. It’s always a good idea to check average auto loan interest rates, and compare to similar lenders, to determine if a lender’s provided rate seems realistic.

We ask lenders to provide their lowest rate that at least 10% of applicants applying for the lowest rate have qualified for in the previous three months, without including any potential rate discounts. The lowest rates shown are typically available only to borrowers with good or excellent credit (a FICO score of 690 and above).

We also ask lenders for their highest rates, which typically reflect rates available to borrowers with fair or bad credit (a FICO score in the mid-600s or below). The highest interest rates result in higher monthly payments and more total interest paid.

Actual rates received by this lender’s auto loan borrowers may be different from the rates shown in this review.

How do we review direct lenders for auto loans?

NerdWallet's review process surveys companies that offer any combination of new car purchase loans, used car purchase loans, auto refinance loans (traditional and/or cash-out) and lease buyout loans. These companies include direct lenders and aggregators; the latter group doesn't have in-house loan products but matches borrowers to third-party lenders within a network. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgements on which ones will best meet your needs. We adhere to strict guidelines for editorial integrity.

Our survey for direct lenders has different questions than the survey for aggregators, but each includes more than 60 data points. NerdWallet independently confirms product details and, when necessary, follows up with company representatives. At least two writers and an editor verify the facts for every lender review to ensure data are accurate.

To receive a star rating, a lender must respond to NerdWallet’s annual auto loans survey. Star ratings are then assessed from poor (one star) to excellent (five stars).