Fixed bank loan vs CU loan?

[johnny_adida]

Hi everyone, Does anyone know what the penalty for paying off a fixed personal loan early with Ulster bank is? (i will be paying off the loan in february when my ssia matures but need the money for an emergency now)

ive the option of a 11k loan with ulster bank at 8.2% fixed (who i have my mortgage with) or same amount with the credit union at 10.5%? which would be the better option?

 

[ClubMan]

Hi everyone, Does anyone know what the penalty for paying off a fixed personal loan early with Ulster bank is? (i will be paying off the loan in february when my ssia matures but need the money for an emergency now)

The terms & conditions of your loan agreement should clarify. Failing that aks UB.

ive the option of a 11k loan with ulster bank at 8.2% fixed (who i have my mortgage with) or same amount with the credit union at 10.5%? which would be the better option?

Are those APRs or nominal rates? Does the CU loan rate take into account the need to keep money on deposit/in shares while borrowing? Could you not get a mortgage top-up at lower rates scheduled over a similar term to the unsecured personal loan alternative (e.g. 1-2 years rather than 10-20 years of the mortgage term)?

 

[johnny_adida]

ive searched their website but cant seem to find anything bout paying off early

didnt realise u could have 2 loans as such working off the mortgage rate. i just presumed it would have to be a shorter loan at higher rate or else having to go off and remortgage for the new amount. (not really a runner as the money will be needed in the next 10 days)

the 8.2 is APR and i think the credit union is 11.something

 

[ClubMan]

ive searched their website but cant seem to find anything bout paying off early

Did you not keep a copy of the loan agreement that you signed? Why not just call UB and ask?

didnt realise u could have 2 loans as such working off the mortgage rate.

Some lenders will facilitate a top-up scheduled over a shorter period of time than the whole mortgage loan. Others may not. Especially those who see an opportunity to sell you a higher cost unsecured loan instead. Even if the top-up cannot be scheduled over a short period you can always accelerate repayments to make this effectively the case but it takes some discipline. In addition certain mortgage top-ups may give rise to the need for higher mortgage protection life assurance cover.

i just presumed it would have to be a shorter loan at higher rate or else having to go off and remortgage for the new amount. (not really a runner as the money will be needed in the next 10 days)

What is the loan for? Do you really need to borrow or could you fund part of the purchase through other means (including other savings or maturing SSIA)?

The higher the APR the higher to cost of the loan. CU loans are a bit more complicated because their effective cost is higher again because of the normal requirement that you keep money on deposit or in shares while borrowing from them instead of using this to reduce your borrowings and costs.

 

[johnny_adida]

i havent got the loan with ulster bank. im only looking into it

cant put off the spend as its for central heating for the house which packed in last week. already have a loan with credit union, was for about 10k (surprisingly enough against a 600euro savings balance), for which i paid off 30% or so in the last yr. currently building a garage from my casual money & dont want to be stuck for money (due to increased loan repayments) to complete before the winter really kicks in so will need to borrow the remainder to finish it.
dont want to cash in my SSIA as it wont mature til feb. will be using this to clear the loan at that time.

so just wondering if the 8.2 % from ulster bank is better than the reducing rate loan from credit union, given that i will be clearing it early.
obviously a new mortgage is not ideal either as money will not be made available soon enough (not with my experience of ulster bank anyway)

 

[Miles]

I was speaking to my CU and they were offering 7.2% fixed on a loan of 20,000. Might be worth trying to negociate with your local CU before approaching your bank.

I notice Bank of Scotland Ireland are offering 7.2% personal loans, although Im not 100 per cent sure its fixed...