Agri Interest Rates

Red Cloud

Hi
Is there any source for stocking loan interest rate comparison table?
Turning to banks as my credit union charging 7.95%, and each year making noises about new regulation banning lump sum pay offs.

whelan1

will look up bank rate but our credit union is charging 10% interest at the minute:eek:

colrow

I had an "ordinary" loan from the bank, that I paid off in lumps, with no interest penalty, you have to tell them that's what you want to do though. hth

KatyMac

Has anybody had the Credit Union complaining that you pay in with lump sums? 2 or 3 or 4 times a year I put in the proceeds of a sale or whatever. Doing it for years and this year when I went to see if I could get a loan for my tractor they told me my history wasn't that great as I wasn't putting in regular sums every week/month and that they probably wouldn't be able to give me a loan! My credit union account has decreased since then as I don't see any point in having it if they won't give me a loan, was only looking for €1,500 - €2,000 and was planning to have it paid off in a year - not talking mega bucks.

Red Cloud

KatyMac wrote: »

Has anybody had the Credit Union complaining that you pay in with lump sums? 2 or 3 or 4 times a year I put in the proceeds of a sale or whatever. Doing it for years and this year when I went to see if I could get a loan for my tractor they told me my history wasn't that great as I wasn't putting in regular sums every week/month and that they probably wouldn't be able to give me a loan! My credit union account has decreased since then as I don't see any point in having it if they won't give me a loan, was only looking for €1,500 - €2,000 and was planning to have it paid off in a year - not talking mega bucks.

My credit union is employee based not locality based. They won't continue with stocking loan and are quoting objections by state regulator as excuse. It's very hard to know if they just don't want lump sum loans on their books and are bluffing about regulator or if there is a genuine regulation issue. I have written to financial service ombudsman to get clarification. Had stocking loans with them for 6/8 years with no issue or problem. I suspect they are reacting to bad debts from loans they unwisely gave to members speculating during property bubble.

badgerbroc11

Red Cloud wrote: »

I have written to financial service ombudsman to get clarification. Had stocking loans with them for 6/8 years with no issue or problem. I suspect they are reacting to bad debts from loans they unwisely gave to members speculating during property bubble.

You have done the right thing contacting the ombudsman and maybe this will shed some light on regulatory requirements.

Unfortunately the truth is that lump sum loans are effectively forbidden and where granted the cu would be required to put in a 100% provision against it as an expected bad debt no matter what your history. Mad I know but this is the it currently is. The other problem is that a stocking loan is also considered as a business loan, another thing the regulator doesn't want the credit union doing.

Look at your cu's last set of accounts, and you will see that cu's have far more money on deposit than they have lent out. They want to lend it but are being prevented from doing so.

Whilst a lot of the new regulations are good and required for the future strength of the credit unions, people making the rules some times can't distinguish between a small agri loan which will be repaid after the harvest or when the cattle are sold and a property development loan. ....

Red Cloud

badgerbroc11 wrote: »

You have done the right thing contacting the ombudsman and maybe this will shed some light on regulatory requirements.

Unfortunately the truth is that lump sum loans are effectively forbidden and where granted the cu would be required to put in a 100% provision against it as an expected bad debt no matter what your history. Mad I know but this is the it currently is. The other problem is that a stocking loan is also considered as a business loan, another thing the regulator doesn't want the credit union doing.

Look at your cu's last set of accounts, and you will see that cu's have far more money on deposit than they have lent out. They want to lend it but are being prevented from doing so.

Whilst a lot of the new regulations are good and required for the future strength of the credit unions, people making the rules some times can't distinguish between a small agri loan which will be repaid after the harvest or when the cattle are sold and a property development loan. ....

Think you've nailed it there badgerbroc11. I'll wait on response from ombudsman doubt if it will be as frank and accurate.
It's daunting preparing to approach the banks never dealt with them before for Agri loan ..need circa €30k don't know if they will demand security and farm
Accounts etc.
I don't want to end up fattening stock for a year just to keep the banks ticking over, had been paying 6% with credit union.

Sam Kade

Credit union loans are a joke you must have a certain percentage of what you are borrowing in savings there before they will give you a loan. Why would you be borrowing and paying 10% interest if you had savings.

whelan1

Sam Kade wrote: »

Credit union loans are a joke you must have a certain percentage of what you are borrowing in savings there before they will give you a loan. Why would you be borrowing and paying 10% interest if you had savings.

yes but if you can go up in an evening and have the cash home with you the next morning it can be a lifesaver for a lot of people

badgerbroc11

Sam Kade wrote: »

Credit union loans are a joke you must have a certain percentage of what you are borrowing in savings there before they will give you a loan. Why would you be borrowing and paying 10% interest if you had savings.

Sam,
Each credit union has different policies as it is the local community who own the credit union and set the policy accordingly.

CU's are a financial cooperative where the money you are borrowing is from the savings of your neighbour's.

The reason why cu's insist on savings is that they are a self help organisation, a message which is far too often not communicated correctly.

The idea is that you first create a savings habit, then based on this you borrow on the strength of the savings and use this borrowed money to generate income. Whilst paying back you're loan you continuing to save and after a while you get to a stage where you don't need to borrow any more.

At this stage your savings then form part of the pool available for others to borrow from and you no longer incur the additional expense of loan interest.

1chippy

I went buying a bit of land last year. i had 40% of the price and banks wouldnt lend as i am self employed. credit union and a bit tangling and i got the ground. I cant really knock them , i wouldnt have got it otherwise.