Greylock Federal Credit Union
By Joyce Moed, Reporter

PITTSFIELD, Mass.- Greylock Federal Credit Union has recently launched an auto loan product for consumers with impaired credit who have a willingness and ability to make their loan payments.
The New Road Loan Program resets every six months to a lower rate if the borrower reestablishes good credit.

"It's remarkable the amount of people out there that's only choice is a subprime loan," said Christopher Moon, vice president/manager of consumer loans. "We want to let people know there is an alternative."

Charlie Bercury, senior vice president of consumer lending at the 60,000-member credit union, said the loan was developed as a way for people with imperfect credit to secure a reasonable auto loan rate and ultimately improve their credit scores.

"Once a person's credit rating suffers for whatever reason, a subprime loan may seem like the only option," Bercury said. "This program provides a constructive alternative to subprime lenders."
With the New Road Loan Program, borrowers will initially be charged about half the rate charged by subprime lenders, Bercury said. Then the loan rate is reduced after each six-month period of solid payment history.

The starting rate for the New Road Loan Program will range from 10.99% to 12.99%, explained Moon, with subprime loans ranging from 17.99% to 19.99%. Every six months, if timely payments are made, the rate will be reduced by .5%. After three years, if payments are made as agreed, the rate could reach 7.99%. And after three years of successful payments, the member is guaranteed another loan at the CU's normal rate.

Greylock has been marketing the new loan product through a press release sent to the area's local newspapers, in addition to Moon participating in a radio spot on a local talk show. The CU is also working with local auto dealers, who can fax over the loan applications from potential customers directly to the credit union, as long as the consumer qualifies for Greylock FCU membership. Membership is open to anyone who lives, works or worships in Berkshire County, as Greylock FCU is a community-chartered credit union.

"After three successful years in the program, the loan rate will equal the conventional Greylock rate, and in the process, the borrower will likely have improved their credit rating," Bercury said. "For their next loan, the member will qualify for Greylock's standard auto financing. This program offers an affordable solution and alternative to get deeper and deeper in debt."

Moon said response to the new loan has been very positive, but that the goal is not to try to enlist numerous borrowers.

"This is an opportunity for people to get their rates back down and for people to get back on track," he said.