Credit Union Question for wedding

sweetypie

I am wondering if anyone can help me with regards to the CU.I am looking to take out a small loan for my wedding in September.It is my first loan with them but have been saving with them for 2 years now.How much are you allowed to borrow on your first Loan?

Can you get your loan from them a few months in advance and then set a date after the wedding to start repayments, is that allowed?

Any advice would be grateful.
Thank you.

D3PO

As I understand it and Im not an expert so I stand corrected your first CU loan can be a max of twice what you have saved.

In regards to getting a loan and starting payments at a later stage given the current environment I doubt it but if you dont ask you wont know.

janbaby

I'm nearly sure you can borrow 3 times your savings. When you get the loan you negotiate the length of time for paying it back. There are generally no penalties for paying it back early but I think they still negotiate it over at least 1 year. Not 100% sure tho. I'm in the same boat myself

ABajaninCork

The easiest thing to do is to contact the CU and see what they say, surely?

amdublin

sweetypie wrote: »

I am wondering if anyone can help me with regards to the CU.I am looking to take out a small loan for my wedding in September.It is my first loan with them but have been saving with them for 2 years now.How much are you allowed to borrow on your first Loan?

Can you get your loan from them a few months in advance and then set a date after the wedding to start repayments, is that allowed?

Any advice would be grateful.
Thank you.

No I doubt it.

You get a loan and start paying it back immediately. Standard banking/loan proceedure.

Probably best to just save longer rather than getting a loan for one day which you then have to pay back over month and months.

Dow99

It used to be the case that on your first loan you can only request double what your investment is, and then x3 for your second.

This is no longer the case, and each request is dealt with case by case, so you would have the potential to borrow over 3 times your investment based on their criteria for your first loan.

kc66

Im not saying anyone is wrong but a few years ago I got a few thousand loan and I had nothing saved with them. I was required to set up a standing order so I set one up paying €20 a week into my account.

bridetobeone

Well I would advise you to call into a CU and discuss your options. I was told that the CU have put a cap on the amount a person can borrow now. This might not be the case for every saver but apparantely it's now 10k regardless of savings! Don't quote me on it though like I said it contact your CU and they should be able to advise you properly!!

k4899g

It's usually twice the first and three times the second and sebsequent loans. To get around this I borrowed €1,000 months before I needed my big loan and paid it back €100 per week for 10 weeks and after a few months applied for my big loan. You've more wiggle room to ask for a big loan after one loan as they can see that you paid it back on time etc.

TheChevron

DO NOT tell them that the loan is for a wedding. You will more than likely be refused, no matter how small the amount. Say its for home improvements or something like that. They do not like to give loans out for weddings. I know this all too well from experience.

amdublin

TheChevron wrote: »

DO NOT tell them that the loan is for a wedding. You will more than likely be refused, no matter how small the amount. Say its for home improvements or something like that. They do not like to give loans out for weddings. I know this all too well from experience.

How about just don't borrow for your weddingg

Peregrinus

1. Ignore the advice from theChevron. Do not lie to your lender, ever. Leaving aside the tiny matter that it may be a criminal offence, it really buggers up your situation if, at some later point, you need to adjust your affairs or renegotiate your repayments, or whatever. You will have no credibility with your lender if they think you lied the first time around. Zero.

2. Why would you want to draw down the loan and spend it before the wedding? The really big bills arrive after the wedding. That's when you need the money. If you can't finance the relatively modest pre-wedding costs, how are you going to finance the wedding itself?

3. If you do draw down and spend the money, on what basis will you suggest that you should defer repayments until after the wedding? Will your ability to repay - i.e. your earnings - go up after the wedding? If you can't make regular repayments before the wedding, what is going to change afterwards? Unless there is something unusual that you haven;t told us about, I think the fact that you ask for this is going to be a bit of a warning signal to the lender.

4. Be aware that, if you do somehow negotiate a repayment holiday, it isn't free. Interest is charged and added to your loan as per usual so that, by the time you start to make repayments, you will have a larger debt to service. And this underlines the desirablity of not drawing down and spending the loan before you need to. If this wedding is going to be partly financed by savings and partly by a loan, use your savings for the intitial expenses and so far as you can put off drawing down the loan until you are in position to service the debt. If you're not in a position to service the debt, then I think you need to ask some hard questions about whether you can afford the wedding you're planning.

TheChevron

Pergrinus, save the high moral ground please. Criminal offence? I cant see hard time coming from it tbh. If they cant prove that money transferred into Lowry's account were bribes they will hardly be able to call you up on what way you spend your loan.

OP, I'm just saying that if you really want the loan, do not say its for a wedding as your chances of getting it will be severely diminished.

LBD

We borrowed a small amount in february to cover a few bits we needed for the wedding from our local credit union, thought didnt even cross my mind not to tell them what it was for and they had no problem when I said it was for the wedding, infact the woman was lovely about it.

They actually had a very large advertisement in the foyer of the building encouraging people to come to them for help with their "special day"

stinkle

Hi, I'm a former CU employee. The most important thing to remember is each CU is independent, it's not like bank branches. So each one has their own criteria, and maybe your own has different rules than the ones quoted on the thread.

Generally they prefer if you take out small loans and prove you can pay them back before borrowing large amounts. In my experience the cap was €250 max above what you had already saved, no matter how much you had (e.g. save €1000, borrow max €1250 first time, or save €2000 borrow max €2250). Oh and you need to have saved for a minimum period before being able to apply for a first loan. It;s usually 3 months (as in 12 weekly payments, not just chucking money in randomly!)

So if you have the time, then consider borrowing €1000 or something you can afford, and pay it back over a few months. They also frown upon paying loans back too quickly - as it's not really a "loan" then as such, and you've basically not given any evidence of being able to stick to repayment schedule. Generally 6-10 weeks is the MINIMUM period for paying back a loan, and your first loan should really be paid in full before applying for a second one.

There shouldn't be a problem telling your CU that you're borrowing for a wedding, but different "reasons" have different max repayment windows - e.g. holidays are classed as yearly events, so if you say "holiday" then you get 12 months to pay it back, and of course the weekly/monthly repayment is higher than if it was spread over a longer period. Same goes for school fees, etc. Cars are generally 4 years, while home improvements can be up to 5 years, depending on amount/work to be done etc.

Like I said, all CUs are different and I haven't worked there in a few years (pre-recession), so maybe things are a lot stricter now. But it is mostly common sense with CU loans - save a bit, then you can borrow; prove you can pay back loans, then you build a credibility and can borrow more later on.

I doubt any CU lets you take out a loan and start paying it back later, it has to be next week/month/fortnight. HOWEVER, you could APPLY for it now, and if the loan is approved then there's no requirement to take it out immediately.

Good luck, but really jsut give your CU a ring or call in, they're usually run by lovely normal people! Ooh also they like folk to set up standing orders, so that might work in your favour if you normally pay bills through the bank

roseym

Peregrinus, believe it or not, the bills pour in for weddings well in advance of the big day. Things like suits, rings, venue deposits, band/photographer/florist deposits, wedding dresses etc don't just fall out of the sky you know. It's just the final instalments that are paid on the day. The real pinch is felt by couples in the run up to the wedding.

OP, having recently had my wedding loan approved, here are some tips:-
-you will need to show three months payslips and 6 months bank statements
- my loan was approved at a 5:1 loan to savings ratio, however I have been borrowing/saving with them for 15 years now. Get a small "practice" loan off them NOW to demonstrate your ability to make regular repayments and have the loan cleared before applying for the real loan.
- If you have any mickey mouse loans that are near the end of their term, clear them before applying.
- my savings have been frozen as security, but I will be able to use them to pay off the end of the loan (once the security exceeds the size of the loan). So this might have an impact on the amount of the loan you will want.
-when applying for the loan, spread the repayments out over the maximum time period (5 years), this will go in your favour when they are considering the debt to income ratio. You can pay it off quicker if you want without penalties, but have the official repayment term set at 5 years.
- check out your debt to income ratio (include loan repayments at a 5 year repayment level) using the calculator at http://credit.about.com/library/calculators/bl_debttoincomeratiocalc.htm If it tells you that you are in or close to financial difficulty then clear off any smaller loans and/or get a second job to supplement your income and then apply. I'm not sure what the CU consider to be a good ratio but I'd say 36% would be the cut off.
- I said straight out that it was for a wedding and I think it actually went in my favour because the loan application officer seemed really determined to make sure it got approved. I was prepared to pay it off much quicker (and have been saving a higher amount that the repayment is with them so have a proven ability to do so) but she is the one who told me to spread it out over the 5 years so that I would come out with a satisfactory debt:income ratio.
- I called them a year in advance of applying for the loan telling them that I would be applying for a wedding loan and asking what I needed to do to make sure it got approved at the time. They told me to increase my savings with them, so I did. I'd suggest that you make a similar phonecall and see what they say to you, they're extremely helpful.


Best of luck with it and congratulations on the upcoming wedding

BeardySi

Ffrom talking to them in my local CU last week, I'm told their cutoff is a 15% ratio, but depending on circumstances up to 20% can be worked with...