Credit Union Loans

gearbox

After reading another post just there about car loans it triggered a question ive been saving like a mad man in the credit union have approx €3000 built up now over the past 10-12months and just finishing of my 1st loan... have about €200 left to pay off on it and to be honest i could pay it off now if i wanted but ive been advised to build up a payment history with them rather then payin it off in a lump some, i wanna get a car loan for approx €18,000 sometime soon, im just wondering how easy is it to get a loan with them and will i be laughed at if i approached them for a loan of that amount or will i need to save up anymore..... has anybody any experience getting car loans for the credit union? any feedback would be great! thanks

Kinetic^

gearbox wrote:

After reading another post just there about car loans it triggered a question ive been saving like a mad man in the credit union have approx €3000 built up now over the past 10-12months and just finishing of my 1st loan... have about €200 left to pay off on it and to be honest i could pay it off now if i wanted but ive been advised to build up a payment history with them rather then payin it off in a lump some, i wanna get a car loan for approx €18,000 sometime soon, im just wondering how easy is it to get a loan with them and will i be laughed at if i approached them for a loan of that amount or will i need to save up anymore..... has anybody any experience getting car loans for the credit union? any feedback would be great! thanks

I got asked for my insurance quote, so I just did 1 up on Quinn Direct online.

gearbox

Keyser Soze 69 wrote:

I got asked for my insurance quote, so I just did 1 up on Quinn Direct online.

the credit union asked for your insurance quote?

sandyg

As far as i remember they give you three times the amount you have in your savings. Im sure that if you are with them for a long time they could review your finances and come to some arrangement. Ive never heard of the credit union turning down someone for a loan.

Tobias Greeshman

Do remember that the credit union has a much higher rate of interest on loans than banks have.

Yeah as long as you have 1/3 of the cost of the loan then they'll give you the loan without asking any questions really.

Doolittle51

silas wrote:

Do remember that the credit union has a much higher rate of interest on loans than banks have.

No they don't

Tobias Greeshman

yes they do its 12% while banks like aib charging 9-10%

gearbox

silas wrote:

yes they do its 12% while banks like aib charging 9-10%

i think you need to go back to the drawing board every1 knows there the cheapest intrest when it comes to loans its 6% on car loans in the rathfarnham credit union

declanoneill

They work out the interest in different ways. With the bank it doesn't matter how fast you pay off the loan, you pay the same amount overall. Take a €5,000 loan over 5 years. No matter if you pay it off monthly over 5 years, or go in after two months and pay off the remainer, you will have paid the same amount.

This isn't so with the credit union, again take a 5,000 loan:
after one month the interest owed is (say) €35,
you have some spare cash the first month, so you decide to pay €1,035 off the loan, the interest is paid off first (€35) then the rest of the money is paid off the actual loan. Next month, when they work out your interest, they work off €4000, and so on and so forth. Your interest is worked out daily, so you end up paying less because the loan is always decreasing.

At least, so is my understanding

xephyr

silas wrote:

Do remember that the credit union has a much higher rate of interest on loans than banks have.

In my experience, the higher rate is offset by the dividend and rebate that Credit Unions pay.

To the OP, I've never had a Credit Union loan run full term (always paid off or topped up) and I have not been adversely affected. Borrowed 40k from mine recently without any problems.

HTH.

sgarvan

declanoneill that is how credit union loans work

generally your first loan form a cu can only be 3 times your savings but they do make exceptions.

I have had multiple small loans from the cu to pay off college fees and recently went in looking for 18k. Granted without any questions because I had a good payment record. They have different circumstances for different people rather than just having 1 rule

gearbox

did u have a long history with them, i know my savings arent as great as id like but i can afford a big loan no problem im sure if they seen my payslip they wud know that but i dont know if they sonsider things like that

LostinBlanch

Depends on your Credit Union. Check out their interest rate I've heard of 6% from other credit unions for car loans as well. Also they may give you rebate on interest at the end of the year AGM i.e. pay you back some of your interest! Bring your payslips into the union and then tell them you'll arrange for a standing order to pay the money directly from your account to theirs. They tend to like that kind of thing.

Eoin

declanoneill wrote:

They work out the interest in different ways. With the bank it doesn't matter how fast you pay off the loan, you pay the same amount overall. Take a €5,000 loan over 5 years. No matter if you pay it off monthly over 5 years, or go in after two months and pay off the remainer, you will have paid the same amount.

This isn't so with the credit union, again take a 5,000 loan:
after one month the interest owed is (say) €35,
you have some spare cash the first month, so you decide to pay €1,035 off the loan, the interest is paid off first (€35) then the rest of the money is paid off the actual loan. Next month, when they work out your interest, they work off €4000, and so on and so forth. Your interest is worked out daily, so you end up paying less because the loan is always decreasing.

At least, so is my understanding

I think that is the case for fixed interest loans? A variable interest loan will allow you to pay off more than the agreed monthly payment, and the interest will be calculated on the remaining amount.

If you have a fixed interest loan, then you can only pay back the agreed monthly payment and no extra (unless you buy out the whole loan).

OP, if you look at the "Biz" category at the top, you will see some forums that are better suited to specific financial topics.

ROVER

AFAIK Tesco has a fixed rate of between 7-7.5% which is cheaper than most credit unions.

limbovski

I got a credit union loan over 5 years for 4,000. I have 400 left on it 6 months later. I have paid very irregularly and have never been behind. I had only 160 in my account and I had to get a guaranteer (nice spelling) who was a member. The way it works is I pay weekly and every week the interest is recalculated at 5:00 on saturday on the remaining amount, an equivalent amount is frozen in the account of my guarnaerTER... (spelling )

I will be looking for a 10,000 - 12,000 loan soon and went in and picked their brains as I too had been advised by a friend to pay regularly but due to the way I my wages work and my proximity from the cu this is quite difficult. The lady said that it didnt matter that i had missed any because i was always ahead of my payments and that this would be taken into account when I went for my next loan.

sgarvan

gearbox wrote:

did u have a long history with them, i know my savings arent as great as id like but i can afford a big loan no problem im sure if they seen my payslip they wud know that but i dont know if they sonsider things like that

i dont have a long saving history with them but i have a very good credit record. the 18k loan was on a joint account with the missus and all my loans where on my own. so they review everyone seperatly

gearbox

yeah i applied today i rang them up and got speaking to obviuosly their most senior member of staff he was a bit unsure as it was such a big loan but as soon as i mentioned my dad being a member for the last 20+ years he said he'd ask the board members if they would go for it taking my dad as a garontor (dunno how u spell that) have to wait until next week as the board only meet every week to discuss these type of applications so here's hoping, id love it if they said yes but im trying not to get the old hopes up!

Ginger83

Navan credit union will allow people to borrow five times their shares and have a fixed car loan interest at 7.5% not bad. I'm questioning the guarantor bit, normally dont ask for one if you are in full time employment and over 23.

sgarvan

Ginger83 wrote:

I'm questioning the guarantor bit, normally dont ask for one if you are in full time employment and over 23.

they can do if you dont have a sufficent credit history with them

Paul (MN)

just to be anal.... if I had "savings" of €3000 the last thing I would be doing is getting a car loan for €18,000

Savman

wrong forum for financial discussion methinks

elexes

when i got my loan for 8k to buy my focus i had to keep 700 in the cu and not touch it at all the reason they asked you about your insurance quote is to make sure you have taken that into account .