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Credit Union Loan

  • 16-11-2020 10:35pm
    #1
    Danny552
    Banned (with Prison Access) Posts: 58 ✭✭


    Hi I'm looking at getting a credit union loan of around 10k .

    If I have the loan to be payed back in 4 years but pay it off well before is that better?

    will it only affect a mortgage application if it is still getting paid off or if you miss a payment?


Comments

  • #2
    AnRothar
    Registered Users, Registered Users 2 Posts: 624 ✭✭✭AnRothar


    Danny552 wrote: »
    Hi I'm looking at getting a credit union loan of around 10k .

    If I have the loan to be payed back in 4 years but pay it off well before is that better?

    will it only affect a mortgage application if it is still getting paid off or if you miss a payment?
    The first part is easy and straightforward.
    And can be seen in 2 ways.
    1. By "overpaying " a credit union loan you will save on overall interest paid thus saving you money.
    2. While we do not have complex credit scoring we do have a central record.
    This will show you have a history of paying back a loan which is a positive.
    This usually will stand to you when making future credit applications.


    The second part is a bit more complex.

    Usually banks look at your overall ability to repay.
    They usually include factors for spouse/partner (working/not working), children, sudden interest rate changes, other financial commitments (loans/credit cards etc.) etc.
    Any missed repayment will probably raise a query/concern, but this will be true in any subsequent credit applications.


  • #3
    Danny552
    Banned (with Prison Access) Posts: 58 ✭✭Danny552


    AnRothar wrote: »
    The first part is easy and straightforward.
    And can be seen in 2 ways.
    1. By "overpaying " a credit union loan you will save on overall interest paid thus saving you money.
    2. While we do not have complex credit scoring we do have a central record.
    This will show you have a history of paying back a loan which is a positive.
    This usually will stand to you when making future credit applications.


    The second part is a bit more complex.

    Usually banks look at your overall ability to repay.
    They usually include factors for spouse/partner (working/not working), children, sudden interest rate changes, other financial commitments (loans/credit cards etc.) etc.
    Any missed repayment will probably raise a query/concern, but this will be true in any subsequent credit applications.



    Thanks I dont plan on missing a payment, I plan on paying it off a year before my plan is due but just in case added a extra year .

    I will be going for a mortgage in around 2 or 3 years so it will be payed off well before then .

    Does it matter how many loans you have had in a credit history or once it was payed back in time that's all that's important.


  • #4
    AnRothar
    Registered Users, Registered Users 2 Posts: 624 ✭✭✭AnRothar


    Danny552 wrote: »

    Does it matter how many loans you have had in a credit history or once it was payed back in time that's all that's important.
    One loan or a hundred it doesn't really matter.
    In simple terms it's the ability to repay coupled with any missed repayment that will be looked at.


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