# CU loan €8k, shares €5.5k. Reduce shares to below 25% of outstanding loan balance?



## alicialee (17 Jan 2011)

hi can anyone help me i have a loan out with the credit union for 8,000 i have 5,500 in my shares does anyone know if im intitled to take anything out of my shares thanks.


----------



## The_Banker (17 Jan 2011)

I would think no as the shares is lower than the amount outstanding in the loan. 

However, if you have a good track record with repayments they might allow you to take a small amount out.


----------



## Sandals (17 Jan 2011)

i know i borrowed €40k few years ago, needed to keep €5K in account all the time. Ask at your credit union is the best thing.


----------



## Graftgirl (17 Jan 2011)

I think the Credit union loans 3-4 times your savings depending on your particular Credit union so if that is the case then you would think that it would be fine to leave €3000-€4000 on a €8000 loan IMO


----------



## millieforbes (17 Jan 2011)

Graftgirl said:


> I think the Credit union loans 3-4 times your savings depending on your particular Credit union so if that is the case then you would think that it would be fine to leave €3000-€4000 on a €8000 loan IMO


 
+1

I think local rules vary  - I think my local CU has a 4 times rule. You should ask if can access the funds


----------



## Crugers (18 Jan 2011)

alicialee said:


> hi can anyone help me i have a loan out with the credit union for 8,000 i have 5,500 in my shares does anyone know if im intitled to take anything out of my shares thanks.


The only ones that can help you are the Board of your CU.

You are not entitled to withdraw any of your Shares.

If you ask your CU, the Board may decide to allow you reduce the share balance.

The CU Act allows the Board to decide in cases like yours but prohibits the Board from allowing you to reduce Shares below 25% of the outstanding loan balance.
HTH


----------



## darag (19 Jan 2011)

Crugers said:


> The only ones that can help you are the Board of your CU.
> 
> You are not entitled to withdraw any of your Shares.
> 
> ...


If they don't allow a reduction in balance alicialee is probably paying over 29% APR (assuming 10% for the loan and a slightly above average dividend of 1%).  It would be significantly cheaper to put 2.5K on a credit card using the money to close the credit union accounts completely.


----------

