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credit union loan - repaying with my savings?

  • 19-01-2012 12:30am
    #1
    barryd09
    Registered Users, Registered Users 2 Posts: 1,581 ✭✭✭


    Looking for some advice regarding a loan I have with the credit union.

    I have a loan out since 2005 and currently I owe approx €12,000.
    I have approx €9000 in savings with the same credit union.

    I really want to get this loan cleared asap, is it advisable to use my entire savings to pay off as much as possible of the existing loan?
    If it means I can clear the loan asap I am more than happy to do it.
    Any thoughts?


Comments

  • #2
    marketty
    Registered Users, Registered Users 2 Posts: 1,089 ✭✭✭marketty


    I don't see any reason not to really, so long as you don't mind handing over your savings and effectively starting over, credit unions don't have penalties for early repayments like banks do. You will save money by not paying the interest.


  • #3
    irisheddie85
    Registered Users, Registered Users 2 Posts: 762 ✭✭✭irisheddie85


    Usually with the credit union you have to have a quater the amount of your loan on deposit with them, so with 9000 on deposit and 12000 of a loan you should be able to go in and pay 8000 off the loan so you have 1000 in savings and the loan is only 8000.
    Credit unions usually dont have any problem with doing this sort of thing and with the smaller loan you are paying less interest so it should be easier to clear the rest of it.


  • #4
    barryd09
    Registered Users, Registered Users 2 Posts: 1,581 ✭✭✭barryd09


    marketty wrote: »
    I don't see any reason not to really, so long as you don't mind handing over your savings and effectively starting over, credit unions don't have penalties for early repayments like banks do. You will save money by not paying the interest.

    thats what im thinking too. Im not entirely sure where i will be in the next 12-18months as theres a possability that i'll want to leave ireland for a year or two and see someplace else.
    wiping out my savings does seem like a drastic step but i want and need this loan not to be hanging over my head.

    i think i will pop into them in the next few days and speak to them about it.


  • #5
    The Irish Riddler
    Registered Users, Registered Users 2 Posts: 221 ✭✭The Irish Riddler


    It depends how difficult it would be for you to get access to cash if the rainy day happens as its very difficult to get a loan nowadays.


  • #6
    barryd09
    Registered Users, Registered Users 2 Posts: 1,581 ✭✭✭barryd09


    yes that is true also,ive thought about that too.

    i think i will go speak to the CU and see what they say.

    thanks for the replies!


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  • #7
    ryan2010
    Closed Accounts Posts: 3 ✭ryan2010


    what did they say?


  • #8
    barryd09
    Registered Users, Registered Users 2 Posts: 1,581 ✭✭✭barryd09


    They wouldnt allow me to use all my savings to pay off the loan.
    I forgot to mention that i owe an additional €2500 for a car loan so my loans amount to around €14000 and savings if €9000.
    They will take €4000 but not all of it,which i can understand BUT both loans are guarenteed.


  • #9
    SoapMcTavish
    Registered Users, Registered Users 2 Posts: 496 ✭✭SoapMcTavish


    Tried this also .... they don't like to do it as both your loan and your savings are listed as assets on their books ....

    Makes that CU look healthier ... on the books ... :rolleyes:


  • #10
    jd83
    Registered Users, Registered Users 2 Posts: 1,445 ✭✭✭jd83


    I had a loan years ago and lost my job so i paid it off in full with my savings. A few years later I had a full time permanent job and i applied for a loan. They approved it but said as i had used my shares to pay off the previous one that i would need a guarantor or payment protection insurance. So ask the credit union before you do anything.


  • #11
    filmbuffboy
    Closed Accounts Posts: 894 ✭✭✭filmbuffboy


    OP it also varies from CU to CU as to whether or not they will allow you to pay off the remainder of your loan with your savings. I tried to do this on the remaining 3,000 of a 10,000 loan in 2008 and they declined. I have almost 11,000 saved with them at the time. :(


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  • #12
    shy-tall-knight
    Closed Accounts Posts: 349 ✭✭shy-tall-knight


    I currently have 3000 out of a 5000 euro loan to pay and have about 3000 in savings. I don't intend to use it to pay off my loan but can anyone tell me if you are allowed to withdraw from your savings (as I have some excess sundry expenses this month car tax and insurance) whilst you have a loan with them or do they require to not touch your savings until the loan is cleared?


  • #13
    filmbuffboy
    Closed Accounts Posts: 894 ✭✭✭filmbuffboy


    shy-tall-knight wrote: »
    I currently have 3000 out of a 5000 euro loan to pay and have about 3000 in savings. I don't intend to use it to pay off my loan but can anyone tell me if you are allowed to withdraw from your savings (as I have some excess sundry expenses this month car tax and insurance) whilst you have a loan with them or do they require to not touch your savings until the loan is cleared?

    depends on the credit union. mine wont. ive heard other cases where they have. no harm in asking!


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