Credit Union loan for 17 year old

DJ5831

Hi,

I'm 17 and looking to borrow from my local CU in January to buy a car. I've started consistently saving 200/week with them and would be looking to use the savings with them, plus a loan of around 2-2.5k to buy a 6k car. Is it possible for a CU to loan to a 17-year-old or would I need to have a parent take the loan in their name?

Any help would be appreciated, thanks.

TheW1zard

If you're saving 800 a month and you're looking to borrow 2000 then keep saving for another 3 months.

Dont ever borrow money if you dont need to would be my advice.

https://www.boards.ie/discussion/2058277080/credit-union-loan-for-17-year-old

With CUs you probably can’t use the savings, not all anyway. It’s used as collateral for the loan.

You cannot enter a contract legal/financial agreement under the age of 18.

AMKC

Yes it is possible for a CU to loan to a 17 year old.

The best way is to sit down with them and talk it through and yes bring one of your parents or both if your nervous and for support.

I think you be better looking at just getting a loan for the full price of the car you want to buy do and put savings in a bank too.

Normally with the CU for a loan you can take out 3 times the amount of savings you have. That's the way it used to be anyway. Not sure if it's still like that.

Once you have a loan with the CU depending on your savings you might not be able to access that unless you have a lot in it.

You really need to read all the terms and conditions to make sure you know and understand it.

Good luck and drive responsibly and safely when you do get out on the road and you can look forward to many happy years of driving.

mmrs

Go in and have a conversation with your local CU. That way you will know where you stand. You've done some seriously good saving there already. While I'd try to avoid getting loans when possible it is a good learning experience at your age. You will get a feel for the 'pain' of the repayments and a sense of the interest they charge. This will help guide your financial decisions going forward.

They may ask for a guarantor on the loan and generally you must leave what you've saved already in the the account untouched until the balance on the loan is lower than your savings. You can generally also pay off a CU loan early without penalty so discuss this with them also.

So in your case, you may need to take a loan out roughly for the full 6K, leaving your savings in the account. When your savings match what's owed you can then decide if you are happy to continue to pay the loan or to clear it.

It's not a massive loan and CUs are eager to lend presently. Best of luck.

Mrs OBumble

Borrowing money for an asset that depreciates hugely just because you purchase it is stupid. Keep saving.

@AMKC

Most, if not all, CUs will not lend to under 18s, despite the nonsense assertions of @AMKC to the contrary.

Jim2007

https://www.boards.ie/discussion/2058277080/credit-union-loan-for-17-year-old

I would expect it is very unlikely that a CU will give you a loan without someone going guarantor on it. But I could be wrong.

I also suspect that you are significantly underestimating the amount of money required to buy, put the car on the road and keep it there. I'd suggest you put a budget together for the total cost of buying and operating the car say for three years - that would include purchase price, insurance and maintenance - all 2nd cars need maintenance. And at that point remember you have not travelled a single km so add in some money for petrol and of course the interest on the loan, not forgetting that interest rates may go up. And see how you can finance it.

banie01

A 17yo lacks the legal capacity to enter a contract so I'd be very surprised if a CUbor any financial institution would offer credit directly.

Perhaps they'd offer the loan to a guarantor? But I doubt it. Capacity to contract and enforceability in the event of default would IMO mean noone would extend credit to a minor without a 3rd party acting as guarantor or fronting for the loan.

walterking

Assuming you are a new driver, I would hold off buying a car til Easter.

Dark mornings and evenings, inclement weather and your inexperience would make you a perfect candidate for an accident.

From April the evenings will be brighter as will the mornings and weather will be better.

Don't rush it.

DJ5831

Thanks everybody for your replies. I'll speak to the CU in January but after reading this, I'll most likely take a loan for the 2k in a parent's name.

Also for those who were asking/concerned about running costs/insurance, I'm currently driving my parent's cars, 2012 Passat and 2016 Merc E-Class , and I've just passed my test so I'm looking to get something of mine for driving to school and work, most likely a VW Golf or similar, and although most insurers refuse me, my friends are all insured with AXA and they seem to be offering crazy low quotes for young drivers, 1750/year for a 17-year-old with no experience (they don't count named driver exp under a year) for a 2.0l 140hp diesel Golf. (in my own name, without lying!)

kippy

Generally CUs don't require a percentage of a loan to be available in the account before giving out a loan even a first time loan. They look at you capacity to repay. That said I wouldn't think you'd be able get a loan out at 17.

As others have suggested might be best to keep saving.