Reducing Repayments on a loan myself......

ROCKMAN

Hi
Myself and my wife are coming to the end of the third year on a five year credit union loan and have never missed a weekly payment , Like alot of people out there are now really starting to struggle to meet these payments , We have approached the Credit union and tried to get the loan re structured but they have turned this idea down . We were looking to pay 2/3 (66% ) of the weekly payments a week over 3 years instead of the full payments over the remaining 2 years .
My question is ..
If we start doing this yourselves , Would the interest on the loan sky rocket ?(interest is never the same from week to week )
What could/would happen legally ?

We are not stopping payments or refusing to pay the loan back something that would become apparent/visible over the next few weeks /months ,I have be told that as long as we are still making a reasonable and consist effort to repay this loan that par the odd threatening letter ,that not much else will or can be done . Is this true or just an old wifes tale ?

krd

The worst that can happen is it will damage your credit rating.

Many people who get into this kind of trouble just stop making the repayments all together. If it's an unsecured loan, then they can just hassle you for a few months.....And that is it. But your credit rating may be effected, which could make difficult to impossible for you to get a loan in the future.

Contact the Money Advice and Budgeting Service http://www.mabs.ie/

If the credit union realise all they're going to get, is all you're offering to give. That's what they'll accept.

They might be a little pissed off - but that is life.

Croc

With the current legislation Credit Unions unlike banks are unable to restructure loans.
There was an item on The Right Hook on Newstalk discussing it this afternoon. What they were actually discussing was new legislation which is due to come into force, its currently before the Dail. The contributor a Senator who's name escapes me was talking about it and the ludicrous situation that pertains at the moment where the banks can restructure but Credit Unions can't.

If you were to pay 66% I could'ent say what the result would be with respect to Credit Rating etc. But i see no reason why you could'ent. This was the point that the contributor was making, I think he said 1 billion of loans in The Credit Union were in trouble mostly because people were paying the loans off but not at the agreed amount, due to the fact that they could not be restructured.

The interest on the loan will not sky rocket, Credit Unions charge Interest in a different way to Banks, they do in on a reducing balance.
With a bank your interest is calculated on what you original loan amount was where as with a Credit Union the interest is calculated on the current outstanding amount, so as you loan goes down so does your interest.

http://www.creditunion.ie/whatweoffer/loans/#d.en.97

ROCKMAN

Croc wrote: »

With the current legislation Credit Unions unlike banks are unable to restructure loans.
There was an item on The Right Hook on Newstalk discussing it this afternoon. What they were actually discussing was new legislation which is due to come into force, its currently before the Dail. The contributor a Senator who's name escapes me was talking about it and the ludicrous situation that pertains at the moment where the banks can restructure but Credit Unions can't.

If you were to pay 66% I could'ent say what the result would be with respect to Credit Rating etc. But i see no reason why you could'ent. This was the point that the contributor was making, I think he said 1 billion of loans in The Credit Union were in trouble mostly because people were paying the loans off but not at the agreed amount, due to the fact that they could not be restructured.

The interest on the loan will not sky rocket, Credit Unions charge Interest in a different way to Banks, they do in on a reducing balance.
With a bank your interest is calculated on what you original loan amount was where as with a Credit Union the interest is calculated on the current outstanding amount, so as you loan goes down so does your interest.

http://www.creditunion.ie/whatweoffer/loans/#d.en.97

Thank you ,very helpful ..

cladda1112

That is the exact position we are in. Believe me they might not be happy but they will except it if that is all you can give them. I should be paying 55 per wk but reduced it to 30 and partner should be paying 100 but also paying 30. They dont like it but last time they rang we told them we were thinking of reducing it further(they wanted us to give them more) and they said that they would review again in 3 mths. But you credit rating will be effected. You have to do what you have to do to survive in these hard times. Good luck.

ROCKMAN

cladda1112 wrote: »

That is the exact position we are in. Believe me they might not be happy but they will except it if that is all you can give them. I should be paying 55 per wk but reduced it to 30 and partner should be paying 100 but also paying 30. They dont like it but last time they rang we told them we were thinking of reducing it further(they wanted us to give them more) and they said that they would review again in 3 mths. But you credit rating will be effected. You have to do what you have to do to survive in these hard times. Good luck.

Thank you ,good to hear from someone with personal experience of this situation ,Thank you again