# Credit Union Loan



## Chuckles (8 Nov 2008)

Hi...

Got a rate of 8.33% today from my CU for a home improvments loan... Is this rate good or could I get better elsewhere do you think?

Thanks in advance!

Chuckles


----------



## maryanne40 (12 Nov 2008)

The home improvement loan rate with my credit union is 7.5% APR.


----------



## lanie (12 Nov 2008)

Can I ask both posters how much the loan is for?


----------



## maryanne40 (13 Nov 2008)

Mine was for 50k and the repayments are around 270 per fortnight over 10 years. I say around 270 as I haven't the actual documentation here....Note that the repayment is fortnightly.


----------



## demoivre (13 Nov 2008)

Mortgage rates are much lower than the rates quoted here and are likely to go lower over the next year imo. Is topping up the mortgage/getting a mortgage not an option for _Chuckles_ and _maryanne40_?


----------



## maryanne40 (13 Nov 2008)

Hmmmm....possibly. I didn't feel like the hassle of renegotiating the mortgage in the credit crunch era. Credit union is so simple. Expecting a lump sum in a couple of years time and will clear loan then.


----------



## Bank Manager (13 Nov 2008)

Have to say I'd say the same as Demoivre.

If the amount was small I'd say go with with your current option - however E50k over ten years in not an insignificant amount.

Just a quick calculation (not an exact science I know), but assume your current rates and repayments hold then you'll repay c. E71,000 over the ten years.

If you take an equity release (mortgage) over the same period and using a rate of say 5% - you'd repay E63,500.

Against that I acknowledge you don't appear to really be taking a 10 year loan as you intend to pay off in a couple of years time from an expected lump sum, so it may not be worth your while going the mortgage route.  Just one point, make sure you opt for a variable rate, or at least a fixed rate of shorter duration than when your expect lump sum.

Best of luck.

BM


----------

