# What size of loan can I get from my Credit Union?



## DrPhilG

I'm getting married next year, a terrifyingly expensive process. I also need to renovate 2 rooms in my house in preparation for the missus moving in.

All in all I reckon I'll need approximately €50,000 to pay off the wedding in full and do all the renovations/furniture buying needed for the house.

At the current rate I'm saving at, I reckon I'll have a total of €18,000 saved by next May which is when I'll be making the loan application.

The CU have told me that the general rule is that they'll lend up to 3 times your savings so €50,000 is within that. However they did say that for loans of that size they will have to meet and discuss it.

Has anyone else had experience of big loans from the CU, and are they likely to have any problems with it in the light of the current credit crunch? Our combined income is just over €3,000 a month and our mortgage is only €700. That combined with the fact that (at current projections) we've saving about €15,000 a year means that in my opinion we're a safe bet for the loan but I'm just wondering what they think.

Anyone have any ideas?

PS, if the Cred say no, I'll have to borrow €30,000 from a bank and top it up with the €18,000 we'll have saved.  I wonder if the thought of losing a €18,000 savings account rather than lend out €50,000, (with €18,000 of it secured by the savings) will persuade them to allow the loan?


----------



## demoivre

Paying around €1000 per month over 5 years on a cu loan with 18k on deposit doesn't make a lot of sense when you would only have repayments of around €600pm on a 30k loan from the bank over the same period. You can always get a variable rate loan from the bank and pay back an extra €400 pm to clear it more quickly. You could also look at the possibility of topping up your mortgage by the 30k and paying it back over the 5 years as you would do with a term loan. The mortgage route might involve legal expenses, extra life assurance and possibly a new valuation done on your property.


----------



## Dave Vanian

Why don't you use the €18,000 to renovate the house, then save your €15,000 per year until you can afford the wedding?


----------



## DrPhilG

Dave Vanian said:


> Why don't you use the €18,000 to renovate the house, then save your €15,000 per year until you can afford the wedding?


 
Been waiting 8 years already to get married, waiting no more!

Might go down the route of the bank loan alright.  Nuisance is though, I work in the North, so banks in the South won't even give me an overdraft, even though I bank with First Trust in the North and AIB in the South.  AIB say they have no record of my income so won't give me an over draft.

So I'd have to borrow the €30k in the North and transfer it over.


----------



## oldtimer

If you go the credit union route chances are you will get loan alright, but probably a secured loan. Have you any security you can offer?  If you have a mortgage chances are this option already gone with house deeds. Few credit unions stick rigidly to the three times savings rule. Many are awash with money on deposit which they would prefer to have out on loans. Credit union should have reduced attractive rate of interest for house improvements. Also with cu's, you have option of paying off more when you can afford it or re-negotiate if times get rough.


----------

