Credit Union Loan

JamesEIRE

Hi all,

Got a car loan approved for 3k with 800 in savings in August 2018, gonna have it paid off in full this Thursday coming.
They gave me over a year and 4 months think it was to pay back the loan.
The thing is, i wanna take out another loan around July for 7k but since i haven't been saving while paying off the loan would that go against me or no? I just wanted the loan paid off as quickly as possible.

Asking here wondering if anyone else done the same thing and how did it go for yous while asking for another loan? Or if anyone here that works in a credit union what would you think of it?

I'm 25
Working full time.
Thanks

(Would have asked my credit union but wasn't sure if it was a good idea while i was still paying back my first ever loan with them)

GrumpyMe

Sounds like you have displayed that you are a good risk i.e. you got a loan and have (almost)repaid it all. Ability to repay is amongst the most important criteria for granting credit. Consistent savings displays you can afford to repay and similarly repaying a loan does too.
So from the limited information I'd guess your CU would look favourabily on your request.
The only one that can definitively answer your question is your credit union so give them a call.

harr

Once you have paid the previous loan ok with no missed payment you should fine. One thing my CU recommends is to continue to save when taking out a loan even if it’s €10 or €20 a week.
If I need extra cash for anything I will always get a small loan in CU with touching my savings, yes I know I pay interest but for a small loan it’s small enough.

JamesEIRE

harr wrote: »

Once you have paid the previous loan ok with no missed payment you should fine. One thing my CU recommends is to continue to save when taking out a loan even if it’s €10 or €20 a week.
If I need extra cash for anything I will always get a small loan in CU with touching my savings, yes I know I pay interest but for a small loan it’s small enough.

Yeah thankfully never missed a payment.
Yeah mine did recommend the same as yours, i could have done it that way as well but decided since it was my first big loan that showing i could pay it back sooner as the other lad above said shows i'm a "Good risk" and would hopefully make it easy for me to be granted a bit more for when i may need a bigger loan. Gonna ask them on Thursday since gonna go in during my break and pay the rest off and ask them about my next loan.

Thanks for replying to my post.

If yous are both interested in finding out how everything goes up to when i apply, even if i get refused i'll update yous here. I do myself read other posts about "Credit Union Loans" to see how people get on.

jlm29

The credit union often has an official line on how much you can borrow, or they used anyhow. X times your shares. I can’t remember what x is though!
They definitely don’t adhere to it strictly, but it’s probably written in the terms and conditions somewhere!

JamesEIRE

jlm29 wrote: »

The credit union often has an official line on how much you can borrow, or they used anyhow. X times your shares. I can’t remember what x is though!
They definitely don’t adhere to it strictly, but it’s probably written in the terms and conditions somewhere!

They don't x times whatever your shares are, at least that's what they told me when i was brought into the back while applying for the loan. They look at if you can afford the loan and are able to pay back the loan in full within the time given.

Yeah got that right.
(Was gonna write more but the forums is getting a update? so its gonna be down)

jlm29

JamesEIRE wrote: »

They don't x times whatever your shares are, at least that's what they told me when i was brought into the back while applying for the loan. They look at if you can afford the loan and are able to pay back the loan in full within the time given.

Yeah got that right.
(Was gonna write more but the forums is getting a update? so its gonna be down)

It probably varies for each CU so

red_bairn

I was told by my credit union it would be 3 times the amount in savings.

But as the others said, they would have a facility to work out the ability to repay.

I work in a IT provider for credit unions and I've seen examples of people with two loans and very little savings...it is actually crazy that they still let some of these through although I think they have stopped a lot of this from happening since the crash.

jlm29

red_bairn wrote: »

I was told by my credit union it would be 3 times the amount in savings.

But as the others said, they would have a facility to work out the ability to repay.

I work in a IT provider for credit unions and I've seen examples of people with two loans and very little savings...it is actually crazy that they still let some of these through although I think they have stopped a lot of this from happening since the crash.

They definitely clamped down on it since the crash. They usent ask for payslips or anything, but now they do. And I know people who have been asked to put their partner/husbands name on the account as a condition of getting a loan that was far in excess of the shares:loan ratio

harr

jlm29 wrote: »

They definitely clamped down on it since the crash. They usent ask for payslips or anything, but now they do. And I know people who have been asked to put their partner/husbands name on the account as a condition of getting a loan that was far in excess of the shares:loan ratio

Yeah I have noticed this , a lot stricter now as I think a lot of CU got stung badly during the recession. Last loan we got they needed both mine and my wife’s payslips and back accounts for at least 3 months. I know my local CU went very easy on what people could borrow during the boom.

Ri na hEireann

red_bairn wrote: »

I was told by my credit union it would be 3 times the amount in savings.

But as the others said, they would have a facility to work out the ability to repay.

I work in a IT provider for credit unions and I've seen examples of people with two loans and very little savings...it is actually crazy that they still let some of these through although I think they have stopped a lot of this from happening since the crash.

Why is that crazy? Credit unions are in the business of unsecured lending. You don’t have to provide cash as collateral on small or medium bank loans.

jlm29

Ri na hEireann wrote: »

Why is that crazy? Credit unions are in the business of unsecured lending. You don’t have to provide cash as collateral on small or medium bank loans.

It’s crazy because of the level of debt they used to let people on low incomes get into, and often for things like communions and holidays. I have a friend who owed the credit union over 20k a couple of years ago, while she was in very very temporary employment, earning little more than minimum wage. Every time she would get stuck for money, she would go and top up the loan. Fair enough she always made her repayments, but it was a ridiculous position for a financial institution to let her get into so easily.
And obviously the credit unions got badly stung in the last crash, because people did stop paying back their loans. They also realised how crazy it was, that’s why they’ve clamped down on it so much now.

Jamie2k9

A few years ago I was like you and got a loan and paid without saving (early as well). The next time I needed around 7k (savings 1500) and part of the conditions were to save 15 euro per week and pay off loan at the same time.

On general loan topic, mine ask for 6 months bank statements every time in addition to payslips. They would ask for someone to guarantee the loan if they think you might struggle to pay.

Spocker

jlm29 wrote: »

It’s crazy because of the level of debt they used to let people on low incomes get into, and often for things like communions and holidays. I have a friend who owed the credit union over 20k a couple of years ago, while she was in very very temporary employment, earning little more than minimum wage. Every time she would get stuck for money, she would go and top up the loan. Fair enough she always made her repayments, but it was a ridiculous position for a financial institution to let her get into so easily.

Not quite true, part of a Credit Unions ethos is to help those in need, and based on what you described, your friend sounds like she needed the help? I agree though that 20k is a massive debt for someone on essentially minimum wage. As you said though, she always made the repayments, so she sounds like a good risk.

jlm29 wrote: »

They also realised how crazy it was, that’s why they’ve clamped down on it so much now.

Nope, thats all about Central Bank regulation and oversight, not a lightbulb moment on behalf of the CUs

jlm29

Spocker wrote: »

Not quite true, part of a Credit Unions ethos is to help those in need, and based on what you described, your friend sounds like she needed the help? I agree though that 20k is a massive debt for someone on essentially minimum wage.

To be honest, I would think she needed help to get out of debt, rather than getting further and further over her head. She was borrowing for things that were far from essential, so she’d have been better off being told no.

JamesEIRE

Jamie2k9 wrote: »

A few years ago I was like you and got a loan and paid without saving (early as well). The next time I needed around 7k (savings 1500) and part of the conditions were to save 15 euro per week and pay off loan at the same time.

On general loan topic, mine ask for 6 months bank statements every time in addition to payslips. They would ask for someone to guarantee the loan if they think you might struggle to pay.

Yeah would't mind doing that if thats what they need to approve the loan haha
Did they ever ask you to get someone else to sign? and if so have much did you have in savings and asking loan amount? Asking since i have no way of having anyone to sign on with me. But i do understand the reason they ask people to co sign i wouldn't blame them from what posts i've seen above. My first loan with them i didn't need anyone to sign which is great for me..


Update on loan: Fully paid
Savings now: 1k
Filled out a application and just need my bank statements as i got my other things sorted, like payslips and id's. Asked for 6k instead of 7k as posted in my first post.

Thanks for posting. Being honest wasn't expecting anyone to leave a post haha

Jamie2k9

JamesEIRE wrote: »

Yeah would't mind doing that if thats what they need to approve the loan haha
Did they ever ask you to get someone else to sign? and if so have much did you have in savings and asking loan amount? Asking since i have no way of having anyone to sign on with me. But i do understand the reason they ask people to co sign i wouldn't blame them from what posts i've seen above. My first loan with them i didn't need anyone to sign which is great for me..


Update on loan: Fully paid
Savings now: 1k
Filled out a application and just need my bank statements as i got my other things sorted, like payslips and id's. Asked for 6k instead of 7k as posted in my first post.

Thanks for posting. Being honest wasn't expecting anyone to leave a post haha

They did before however I was younger than you and my income wasn't as secure in terms of employment. I didn't want my parents to sign so I asked them what was the limit they would give without a guarantee and I went with that.

Going for 6k is good considering you have 1k savings. In my opinion 1k verses a 6k loan might be viewed as a little risky however if they do ask for someone to sign you might get around it by offering to pay something into your regular shares for savings weekly + paying loan (if they don't ask you) or if you in a position to put in a little extra savings before drawing down the loan. Paying back on time and early will stand to you.

JamesEIRE

Update: Gave them my bank statements and everything that was needed. They must have done a credit check last week when i started the application. So after an hour of handing in the last 2 statements as i had to re-order as i lost the other ones they called me an hour later after they closed and had the meeting to tell me the loan has been "Approved" dead happy, was kinda expecting it to be either a no or a lower amount

Spocker

Great, thanks for letting us know, and best of luck!

JamesEIRE

Spocker wrote: »

Great, thanks for letting us know, and best of luck!

You're welcome and thanks

red_bairn

Ri na hEireann wrote: »

Why is that crazy? Credit unions are in the business of unsecured lending. You don’t have to provide cash as collateral on small or medium bank loans.

I think in this case they had no collateral and the loan amount totalled something like 20k after shares.

Abbey127

Hi all looking to get a loan soon for a car of around 10k can't remember the last time I got a loan was years ago and only about 2k . I had kidney transplant a few months ago so I was out of work for awhile. But I'm back working now would that be a problem getting the loan approved?
Thanks in advance.

Johnny Sausage

Abbey127 wrote: »

Hi all looking to get a loan soon for a car of around 10k can't remember the last time I got a loan was years ago and only about 2k . I had kidney transplant a few months ago so I was out of work for awhile. But I'm back working now would that be a problem getting the loan approved?
Thanks in advance.

every credit union has they're own rules in requirements for lending,

mine just need 2 recent payslips (4 if paid weekly) and a recent bank statement to show the funds going in.

if youre back in work a few payslips you should be fine, speak to them if in any doubt

Abbey127

Johnny Sausage wrote: »

every credit union has they're own rules in requirements for lending,

mine just need 2 recent payslips (4 if paid weekly) and a recent bank statement to show the funds going in.

if youre back in work a few payslips you should be fine, speak to them if in any doubt

Ok that's great thanks and would it make a difference if I went for a personal loan or do I have to pick a car loan ?

Johnny Sausage

Abbey127 wrote: »

Ok that's great thanks and would it make a difference if I went for a personal loan or do I have to pick a car loan ?

They may have different (lower) interest rates for a car loan than a personal loan

Abbey127

Johnny Sausage wrote: »

They may have different (lower) interest rates for a car loan than a personal loan

Ah ok makes sense thanks very much for your help .

Abbey127

Hi do i need to have savings in my credit union account to get a loan ?

jlm29

Abbey127 wrote: »

Hi do i need to have savings in my credit union account to get a loan ?

Yes.

GrumpyMe

Abbey127 wrote: »

Hi do i need to have savings in my credit union account to get a loan ?

You definitely need some minimum funds (€10.00 in most CU's) to be a member, that is the primary requirement for getting a loan.
One of the other requirements is ability to repay.
Being able to have saved would be a good indicator for ability to repay but not necessarily a requirement.
CU policy varies across the movement so asking at your CU will usually get you the definitive correct answer to your question.

Abbey127

Ok thanks I know there is a couple of hundred in there anyway just have not put anymore in .

texas star

I went for a small loan recently way under whats in my shares and no other loan out and never missed a payment.I didn't like all the intrusive questions.It irritated me so much I just took the money out of my out of my shares which CU always advised not to do.Credit union are not the same as they used to be.

GrumpyMe

texas star wrote: »

I went for a small loan recently way under whats in my shares and no other loan out and never missed a payment.I didn't like all the intrusive questions.It irritated me so much I just took the money out of my out of my shares which CU always advised not to do.Credit union are not the same as they used to be.

That's for sure!

Spocker

Much of it down to the regulation from the Central Bank, rather than a shift in how the Credit Union movement wants to present itself

Abbey127

Hi is it better to pay back a creidt union loan weekly or monthly. Also if I pay it off quicker does that help my credit rate .

Spocker

Abbey127 wrote: »

Hi is it better to pay back a creidt union loan weekly or monthly. Also if I pay it off quicker does that help my credit rate .

It doesn't really matter, you should make payments on a schedule that suits you, likely matching your wages frequency. Yes, it can help your rating if you pay it back early and Credit Unions don't charge extra for that (paying back early)

GrumpyMe

Spocker wrote: »

... and Credit Unions don't charge extra for that (paying back early)...

As a matter of fact they charge you less. Interest is based on your outstanding balance at any point in time. Lower balance - less interest due.