Credit Union Loan Interest Rates Extortionate?

Lloyd Christmas

Hi I tried to get a car loan today of 3,500 out of the CU, Have 1,000 in their currently and been in full time emplyment for the last 7months.

Basically I wanted it over 3 years so they came back with 32e a week repayment which doesnt sound like much but when you do the sums.
32*52 weeks*3 years = 4,992 or a 50% interest rate?

Surely Im doing something wrong here because at those rates I might as well go to a loan shark!!

GerardKeating

Lloyd Christmas wrote: »

Hi I tried to get a car loan today of 3,500 out of the CU, Have 1,000 in their currently and been in full time emplyment for the last 7months.

Basically I wanted it over 3 years so they came back with 32e a week repayment which doesnt sound like much but when you do the sums.
32*52 weeks*3 years = 4,992 or a 50% interest rate?

Surely Im doing something wrong here because at those rates I might as well go to a loan shark!!

Did they not quote an APR with the repayments?.

wench

It sounds like they have worked it out over two years, rather than three, so you should get them to check the figures again.

CU rates are usually in the 8 - 10 % APR range, so at about 26%, yours sounds way out.

dlambirl

You can check loans on http://www.goreycreditunion.com/calculator.asp

From your figures - your loan is being repaid over 122 weeks.

If you wanted it over 3 years (i.e 156 weeks) it should cost approx €26.00 per week

halkar

Interest applied to balance. As your balance goes down so does your interest.

320d

I have a car loan currently @ 7% - i think most credit unions are doing good deals on car loans.

kippy

I think the calcs for that car loan may be a bit off alright.
If you wanted to see MASSIVE interest rates check out the cost of getting a 200K mortgage over 25 years assuming a rate of 5%
Then increase the term and see the differences........
That WOULD scare you.