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Credit Union Loan

  • 20-01-2012 2:30pm
    #1
    kevmy85
    Registered Users, Registered Users 2 Posts: 116 ✭✭


    I'm looking at taking out a credit union loan shortly and I was just wondering about a few things.

    1) Does the value of the loan depend on the amount of savings you have in the credit union? eg. If I have €1,000 in the credit union does that limit me to a €3,000 loan.

    2) If the answer to question 1 is yes do I have to leave that sum of money in the credit union for the duration of the loan? Or once I get the loan can I use the money I have in there for other stuff?

    3) I think I've heard that you can pay off credit union loans in lump sums or increase your monthly loan repayments without running into any trouble. Is this true?


Comments

  • #2
    P. Breathnach
    Registered Users, Registered Users 2 Posts: 12,089 ✭✭✭✭P. Breathnach


    kevmy85 wrote: »
    I'm looking at taking out a credit union loan shortly and I was just wondering about a few things.

    1) Does the value of the loan depend on the amount of savings you have in the credit union? eg. If I have €1,000 in the credit union does that limit me to a €3,000 loan.
    That's broadly the way things work. Some CUs apply the 3:1 ratio you instance; other might have a different ratio, but in the same ballpark.
    2) If the answer to question 1 is yes do I have to leave that sum of money in the credit union for the duration of the loan? Or once I get the loan can I use the money I have in there for other stuff?
    Much more the former than the latter. But as you pay back the loan, the savings/loan ratio changes, and that might free up some of your savings for you.
    3) I think I've heard that you can pay off credit union loans in lump sums or increase your monthly loan repayments without running into any trouble. Is this true?
    Yes. And, within reason, if you have trouble making your repayments, CUs can show more flexibility than other financial institutions.


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