# Q on Credit Union & borrowings



## 71mark71 (23 Feb 2009)

any rough idea how much interest rate credit unions charge & can you get a 10 year loan?

do you have to have existing savings & if so, would a lump sum suffice or do they require regular savings

also what multiple of borrowings verses savings do they typically offer


----------



## Damian85 (27 Feb 2009)

Credit unions are all seperate from each other so different rates and policies apply. 

Credit unions are restricted from longer term lending by regulation. 5 years is the cap on the vast majority of their loans. There interest rates generally are in the 7% or 8% region. 

Most credit unions operate on a rule of thumb basis that requires a new member to save consistently for a period of 12 weeks before applying for their first loan.

The multiple of borrowings versus savings is usually in the 2:1 scale for the first loan. Again this is a rule of thumb. Credit union borrowers with a borrowing history can get different multiples depending on their personal circumstances.

These restrictions are general rules. A credit union can deviate from these policies depending on your job security, income, credit rating, and reasoning for the loan.


----------



## Sandals (27 Feb 2009)

my experience, they do 10 year loan, however I went for 5 years when I saw interest amount, borrowed €40000, paying back €53000 interest 12.?? percent. Have to leave €5000 in the account in order to draw down the loan.


----------



## Damian85 (27 Feb 2009)

Sandals said:


> my experience, they do 10 year loan, however I went for 5 years when I saw interest amount, borrowed €40000, paying back €53000 interest 12.?? percent. Have to leave €5000 in the account in order to draw down the loan.


 
Credit unions are restricted to the amount of 5+ year loans on their loan book.

12% seems quite excessive in that calculation. Over 10 years at say 7.5%, the pay back amount would be around 56k.


----------



## Slim (3 Mar 2009)

71mark71 said:


> any rough idea how much interest rate credit unions charge & can you get a 10 year loan?
> 
> do you have to have existing savings & if so, would a lump sum suffice or do they require regular savings
> 
> also what multiple of borrowings verses savings do they typically offer


 
The rates vary and the max. rate is 12.68%. Some are as low as 7%.
You can get a 10 year loan, but probably not for a car. They can only issue a certain percentage of all loans over 5 and 10 years.
 Regular savings preferred. Lump sum looked on with suspicion. Multiple of savings normally required to be built up, but you could start with 3 or 4 and build up to as much as 10.

Best to talk to your preferred CU.


----------

