# Pay off credit union loan with shares?



## ando (7 Jan 2010)

Hi Guys,

I have a credit union loan of 3600 left to pay, and I have 3000 in shares.  Can I use the 3000 to pay off some of the 3600 so that I should be left with 600 to pay?

Obviously I am paying more interest on the 3600 then I would be paying on the 600.  I just don’t know if I can use the 3000 to pay off the loan as it was used as collateral to secure the loan in the first place...


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## Billo (7 Jan 2010)

Ask the credit union staff. Should be OK to do I would say.


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## Crugers (8 Jan 2010)

The Credit Union Act restricts you reducing your shares below 25% of your outstanding loan.
Your Credit Union might have policies in place to restrict your ratio to a higher limit.
Only way to find out is to ask at your credit union.


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## fjgh15 (9 Jan 2010)

If you wait until you have reduced the loan amount to the same or less than the amount you have on deposit, then you will have no problem. Usually they don't like you reducing your deposits until the loan amount drops below that.


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## so-crates (11 Jan 2010)

Based on the assumption that you maintain 25% of your outstanding balance you could pay off 2800

3000-2800 = 200
3600-2800 = 800

It would leave you with 800 outstanding. No harm in asking if you can do so.


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