# 12% interest on Credit union



## 5Times

Hi, 

Myself and the wife needed to borrow 40k from the credit union to buy our house and get some bits etc, we had 15k in savings. 

We are paying back 640 euros per month, I cant remember the term but does 12% sound right. Loan sharks give better rates.


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## quinno

Have a look at [broken link removed]

Then you can make a judgement on rates....


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## BrenG

5Times said:


> Hi,
> 
> Myself and the wife needed to borrow 40k from the credit union to buy our house


 
Why not go to a mortgage lender? Obviously if inly 40K neded you must have extensive equity in the property.


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## HMD

you only pay interest on the ammount you owe with the credit union, so over the life of the loan you'll save.


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## Miles

Just this week I secured a loan with the Credit Union, 35K. The interest rate on this loan is 7.0%.

I have no affliation with the Credit Unions.


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## River

HMD said:


> you only pay interest on the ammount you owe with the credit union, so over the life of the loan you'll save.



not necessarily. They offer both standard APR and also a reducing repayment option. The latter meaning you will pay back a higher amount for first number of years and a decreasing amount in later years. This repays principal quicker and means you are charged less interest. 

From your figures 5times, I would estimate your repayment term as 8 years. If this is correct, then you are getting charged 12%, which is extremely high and uncompetitive. If this is not the term of the loan (if term of loan is longer than 8 years) then you may be on their reducing repayment option. 

Regardless or repayment method, if you are being charged 12% I would advise you to source another lender as together with opportunity cost of any money on deposit together with possible forced share contribution, the real cost of this loan is even higher than 12%.


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## Crugers

> you only pay interest on the ammount you owe with the credit union,


100% True!



> so over the life of the loan you'll save.





> not necessarily.


 At 12% interest rate you are at a "loss" from day one! Although CU's are by law allowed to charge a maximum of 12%, those that do are in the minority and extremely bad value (unless you can't get credit elsewhere for less).



> They offer...standard APR


I think you mean "Fixed" repayment amounts where as time goes by the portion of principal in the fixed repayment increases as the interest due decreases.




> Loan sharks give better rates


So why did you take the loan from the Credit Union?

I am a member of a Credit Union and a voluntary director of a Credit Union.


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## irishpancake

are you mad 5times  

Paying 12% to a CU which presumably still has your €15k as so-called "collateral", giving you a negligable return on it.

Why don't you borrow €25k from either Tesco or Halifax, and just pay the CU loan down to €15k, and use your €15k in shares to clear the debt with the CU.

The figures from [broken link removed] are:

€491.04 p/month over 5 years (60 months) for €25k, no repayment protection(waste of money).

The figures from [broken link removed] are:

€494.88 p/month over 5 years (60 months) for €25k, no repayment protection(waste of money).

The Tesco figure above is based on a fixed rate of 6.9% APR (may have changed as offer was to end Feb 28th  .

The Halifax figure is based on 7.2% APR fixed, and is still available AFAIK.


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## darag

> you only pay interest on the ammount you owe with the credit union, so over the life of the loan you'll save.


This is a meaningless claim.  All financial institutions calculate interest on "the amount you owe".



> Myself and the wife needed to borrow 40k from the credit union to buy our house and get some bits etc, we had 15k in savings.


Did ye need the 40k on top of the 15K or 40k in total?  In other words, could ye have just borrowed 25k and used it with your 15k of savings?



> We are paying back 640 euros per month, I cant remember the term but does 12% sound right. Loan sharks give better rates.


What is the period of the loan?  Looking at your figures it looks like 8 years?


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## ontour

5Times has not asked any question in the original post, they have merely pointed out that they are probably paying a high interest rate and obviously did no research regading a significant financial decision.  In the spirit of their post I would like to declare that I bought a bottle of water in Dublin airport for three euro !!

Maybe 5Times is a disgruntled mortgage broker or lender...check that IP address Clubman ;-)


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## Brendan Burgess

Hi ontour

He has asked a question. Like a lot of people, he has borrowed money from a credit union, assuming that credit unions are cheap. He is now reviewing his position and is surprised to see that he is paying 12%. He seems to be checking with the readership of Askaboutmoney if this is correct. 

I don't see any need to check the IP address. 

Brendan


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## Spondulicks

The credit union is like any lender in that it offers loans on terms that suit it . There is a degree of mutuality about it : if it makes money this pays dividends or covers  bad debts. If you are a member you can influence the rates it charges by attending the AGM and running for office.


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## 5Times

ontour said:


> Clubman ;-)


 

Whats an IP address, and how did i get one, can i get the internet on a floppy disk.

Your right I did very little research into it, my bad, now im paying for that mistake, I've the loan now but I think it should be highlighted more in credit unions that the interest is 12%, in the small print of the final contacts its mentioned but I'd love to know how many people worse off than me miss this little gem of information.

The only comfort I have is exactly what irishpancake suggested, thats the reason I "asked about money". Thanks for the replies guys most of you have been great..


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## suntot

5Times said:


> I think it should be highlighted more in credit unions that the interest is 12%, in the small print of the final contacts its mentioned but I'd love to know how many people worse off than me miss this little gem of information.


 
5Times I think the interest rate varies with every credit union, I have a loan with my credit union at 6.95% which is unbeatable value in my opinion. They are also a lot more accommodating than my bank, allowing me to choose my repayment term based on what I can afford to repay per month. Don't tar all credit unions with the same brush. And it's always worth shopping around before getting a loan


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## BrenG

I still think you should approach a mortgage broker or lender. Why continue to pay 12% when you have viable alternatives?


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## ontour

5Times, although this has probably cost you some money, the positive thing is that you are not locked in to the credit union with this loan and can pay off the loan at any stage without penalty..so a trip to the financial best buys section can still be beneficial to you


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## Margie

The credit unions' interest rates may be high but they have fantastic advantages over any bank.

You can pay off your loan in full at any time without penalty.

my repayments are €50 per week.  sometimes if i can afford it i pay €100 per week which keeps me in advance, reduces the interest and my loan will be paid off quicker - you won't get that lee way in any bank

Also most credit unions are not logged with the Irish Credit Bureau  which means that if you have a bad credit record with a bank chances are the credit union won't turn their back on you

also you can get a top up on your loan at any time eg. at Christmas or for a holiday etc.

The credit unions in my opinion treat people very fairly and have a very down to earth system for the ordinary worker.  the banks don't care who or what you are - you are simply a number.


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## CCOVICH

Margie said:


> You can pay off your loan in full at any time without penalty.


 
Plenty of bank loans allow you to do this too.



			
				Margie said:
			
		

> my repayments are €50 per week. sometimes if i can afford it i pay €100 per week which keeps me in advance, reduces the interest and my loan will be paid off quicker - you won't get that lee way in any bank


 
Agreed in this case-that sort of flexibility is useful, but should not encourage people to reduce their repayments for an extended period of time and thus extend the term of the loan and the overall interest payable.



			
				Margie said:
			
		

> Also most credit unions are not logged with the Irish Credit Bureau which means that if you have a bad credit record with a bank chances are the credit union won't turn their back on you


 
That situation is changing and maybe for the best.



			
				Margie said:
			
		

> also you can get a top up on your loan at any time eg. at Christmas or for a holiday etc.


 
Yes, but maybe people shouldn't habitually borrow to finance such short-term expenditure (unless they can pay it back quickly). The recent Primetime show on debt illustrated why this is a bad idea.



			
				Margie said:
			
		

> The credit unions in my opinion treat people very fairly and have a very down to earth system for the ordinary worker. the banks don't care who or what you are - you are simply a number.


 
Yes, but some of their policies are just too fair for their (and their members) own good.


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## ClubMan

Margie said:


> The credit unions' interest rates may be high but they have fantastic advantages over any bank.
> 
> You can pay off your loan in full at any time without penalty.


Same with most variable rate loans from other lenders.


> also you can get a top up on your loan at any time eg. at Christmas or for a holiday etc.


 They make it easy to get into debt? Super!


> The credit unions in my opinion treat people very fairly and have a very down to earth system for the ordinary worker.  the banks don't care who or what you are - you are simply a number.


 _CU's _have arguably not treated their customers/members well in the past by blowing millions (€34M I believe?) on [broken link removed] (engaging at least three sets of consultants along the way before canning the project), by not making clear the total cost of credit (including the cost of maintaining money in deposits/shares while borrowing), by operating a monopolistic approach to the insurance products that they sold, by (in some cases) not using appropriate prudential oversight to their lending practices putting certain _CUs _in danger of collapse etc. They also haven't treated the wider public well by facilitating tax evasion by members by stalling on the overhaul of the tax rules applicable to _CU _accounts. It would take a lot of down to earthedness to overcome those issues in my opinion!


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## BrenG

I think that if you shop around you will find that almost all of the major Banks offer the same services for lower rates (except of course the Credit Bureau record). Not that I'm making a case for the Banks but they are operating in a competitive market and are much more flexible than people think.


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## Margie

Well excuse me!!

If the credit unions are such blood sucking vampires as you have just made them out to be then why does anyone bother with them.

i was simply making the point that they are far more fair with the ordinary person than the bank.

i have never experienced any troubly with the credit union and obviously i wasn't suggesting that people should get top up after top up.  You need to borrow wisely and as with any loan you need to have a good head on your shoulders.

i also think that people who have had a bad credit history and are now trying their best to get back on their feet deserve a chance.

i'd like to have alist of all of the banks that allow you to pay off a loan with no penalty please.


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## ClubMan

Margie said:


> If the credit unions are such blood sucking vampires as you have just made them out to be then why does anyone bother with them.


Nobody said anything of the sort. But they are far from the utopian solution to consumer savings/credit that many people like to believe usually having had it mindlessly inculcated in them for years by past generations that this is the case. It's one of those "well known facts" that is nothing of the sort that _CU's _are the cheapest/best lender for people. Why do people bother with them? Same reason some people take out mortgages/personal loans at higher rates than they could get elsewhere by shopping around etc. I suppose...


> i was simply making the point that they are far more fair with the ordinary person than the bank.


 That is debateable especially given the issues that I raise above.


> i also think that people who have had a bad credit history and are now trying their best to get back on their feet deserve a chance.


 More and more _CUs _are joining the _ICB _these days by the way.


> i'd like to have alist of all of the banks that allow you to pay off a loan with no penalty please.


 Most variable rate secured and unsecured loans can be paid off without penalty.


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## Margie

ClubMan said:


> Most variable rate secured and unsecured loans can be paid off without penalty.


 Where would you pay off a €25000 loan with no penalty?

I'm thinking you must work in a bank.

The fact remains that most people prefer the credit unions as do i.

i can't stand the banks.


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## BrenG

"I can't stand the banks"
I think that is a slightly unfair remark. Admittidly the Banks have been involved in dubious practices in the past and have in some cases overcharged customers and assisted in tax evasion. In general these practices have now ceased and the financial sector in general has just about got its act together.
Credit Unions are not better than Banks nor are banks better than Credit Unions its effectively an individual decision as to who can supply the best product or service at the right price. In the case of the OP it would appear that he is paying an extremely large interest rate to an institution when he does have alternative options. In his position he may wish to forgo some of the "possible" benefits of dealing with a CU for a lower interest rate from a Bank or Building Society.


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## ClubMan

Margie said:


> Where would you pay off a €25000 loan with no penalty?


Many lenders offer variable rate loans with no penalties for early redemption. All variable rate owner occupier mortgages from all lenders are one obvious example since by law they must not impose penalties for early redemption.


> I'm thinking you must work in a bank.


You are thinking wrong so if you are thinking of me.


> The fact remains that most people prefer the credit unions as do i.


Some people are not aware of the pitfalls with borrowing from a _CU _and are not aware of the possibly better options available to them.


> i can't stand the banks.


Fair enough. At least now we know that you're not objective on this issue.


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## CCOVICH

Margie said:


> If the credit unions are such blood sucking vampires as you have just made them out to be then why does anyone bother with them.


 
Complete nonsense-nowhere do I imply anything of the sort.  If you look at any posts I make in threads where people are finding it hard to refinance existing debts, I always recommend CUs over sub-prime lenders.



			
				Margie said:
			
		

> i'd like to have alist of all of the banks that allow you to pay off a loan with no penalty please.


 
*ANY* variable rate loan should allow this facility.  Also fixed rate loans offered by Tesco.

The only point that I wanted to make is that many of the facilities offered by the CUs can lead to problems down the line and I don't like seeing them promoted without a 'health warning' attached.  Expensive credit with strict terms and conditions can sometimes be in the best interests of the borrower.


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## oldtimer

Clubman has said it all with the  _*''But they are far from the utopian solution to consumer savings/credit that many people like to believe usually having had it mindlessly inculcated in them for years by past generations that this is the case. It's one of those "well known facts" that is nothing of the sort that CU's are the cheapest/best lender for people.''*_  This certainly is the mindset of the general public handed down by the previous generation. There is serious competition out there now which wasn't there in past decades. CU savings rates are disastrous and lenders like Tesco are offering stiff competition. The big plus's for CU's are convenience and the personal touch of self weekly transactions. How long they will continue to hold the higher ground remains to be seen. Maturing SSIA's will not help their lending targets. Bill Hobbs recently resigned from the Credit Union Development Association. Was it because he was frustrated at lack of progress in coming into the 21st century?


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## ontour

_



			CU's
		
Click to expand...

_


> have arguably not treated their customers/members well in the past by blowing millions (€34M I believe?) on [broken link removed] (engaging at least three sets of consultants along the way before canning the project),




I do not see a correllation between the treatment of members and a failed IT project.  The failed project was by all accounts a disaster of epic proportions but unless you contend that this was done intentionally, it does not reflect how members are treated.

There are definitely a lot of ways in which credit unions can better meet memebers needs.  Based on the specific comsumer's needs there are cases where credit unions are the best options but there are now and will always be many cases where other financial institutions will meet your needs better.


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## ClubMan

oldtimer said:


> Bill Hobbs recently resigned from the Credit Union Development Association. Was it because he was frustrated at lack of progress in coming into the 21st century?


Did he actually resign? I thought that there was just talk about him considering this step. Did he take it in the end?


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## ClubMan

ontour said:


> I do not see a correllation between the treatment of members and a failed IT project.  The failed project was by all accounts a disaster of epic proportions but unless you contend that this was done intentionally, it does not reflect how members are treated.


As members of the _ILCU _individual _CUs _and their members had to foot the bill for this mess. They were badly treated by incompetent management allowing this mess to develop. Just because it was not deliberate doesn't excuse it in my opinion.


> There are definitely a lot of ways in which credit unions can better meet memebers needs.  Based on the specific comsumer's needs there are cases where credit unions are the best options but there are now and will always be many cases where other financial institutions will meet your needs better.


 I agree. In some cases the _CU _may be the best option for some people. I know of some people for whom it is the only option due to irregular income and no banking track record to speak of. But they are certainly not always the best, only, cheapest option as some people still seem to assume.


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## Margie

Oh please let's get real here.  The fact is that credit unions are the more friendly lending option.

i remember a couple of years back every time i went into my bank they were asking me did i want a loan or a credit card.  the attendant went through such pains to get me to sign up for a credit card (i didn't) one day that she made a mistake in my lodgement.  a while later i decided to apply for a car loan and was turned down - boggle the mind.

i walked into the credit union and got my loan no problem.  i am expressing a personal opinion here.  another example - my husband and i went though a few banks to get our mortgage.  The ones that turned us down are now the ones that send us literature and are trying to snap the hands off us.

What i would say to the OP is to pay alittle extra here and there off the loan when you can afford it and you won't feel paying it off.  This is an option that BANKS DON'T GIVE.


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## ClubMan

Margie said:


> Oh please let's get real here.  The fact is that credit unions are the more friendly lending option.





> What i would say to the OP is to pay alittle extra here and there off the loan when you can afford it and you won't feel paying it off. This is an option that BANKS DON'T GIVE.


If you are willing to pay what will often be a premium for friendliness and flexibility then of course that's your prerogative. But please don't try to make out that the _CUs _are generally or always a better option than other lenders. You already told us that you can't stand the banks so there is not much point in trying to reason with you on that issue to be honest.


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## CCOVICH

ontour said:


> There are definitely a lot of ways in which credit unions can better meet memebers needs. Based on the specific comsumer's needs there are cases where credit unions are the best options but there are now and will always be many cases where other financial institutions will meet your needs better.


 
Yes-I agree.


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## Margie

ClubMan said:


> You already told us that you can't stand the banks so there is not much point in trying to reason with you on that issue to be honest.


 

i can't stand the way banks operate. Eg. recently BOI had a 100%mortgage week for 1st time buyers. i walked into the bank and there were balloons and bunting and fancy posters up everywhere. A colleague of mine thought to himself great i'll go and inquire. his combined income with his partner is €65k p.a. and he was refused because you must have a joint income of €80k p.a. now that is ridiculous. he stated to the mortgage advisor that if you were getting that type of income you are more than likely both in professional roles and wouldn't need a 100% mortgage and the advisor AGREED with him.

False advertising i say. You won't get that type of misleading info in the credit union.


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## gotsomenow

Oh! :-S  

This post just made me ring the credit union to check my interest rate.  I was always very niaive when it came to the credit union thinking they are there for the benefit of the community etc....

Okay, I just rang and I pay €600 per month to them. 

Balance of loan  - €20668.09 on 12.5%%%% (On a reducing balance, whatever that may be).  5 Year term.

Feel like a right goon now!


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## ClubMan

Margie said:


> False advertising i say.  You won't get that type of misleading info in the credit union.


What about _CUs _(up to 1st April 2005 when they were forced to change) failing to quote _APRs _on loans and even when they do not pointing out that having to maintain money in deposits/shares while borrowing further increases the cost of borrowing?


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## ClubMan

gotsomenow said:


> Balance of loan  - €20668.09 on 12.5%%%% (On a reducing balance, whatever that may be).  5 Year term.


They are obliged to quote you an _APR _on that. While it will not take into account the cost of having to maintain money in deposits/shares while borrowing it should be more helpful than this obfuscated explanation in comparing rates with other lenders.


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## irishpancake

Margie said:


> i can't stand the way banks operate.  Eg. recently BOI had a 100%mortgage week for 1st time buyers.  i walked into my bank and there were balloons and bunting and fancy posters up everywhere.  A colleague of mine thought to himself great i'll go and inquire.  his combined income with his partner is €65k p.a. and he was refused because you must have a joint income of €80k p.a.  now that is ridiculous.  he stated to the mortgage advisor that if you were getting that type of income you are more than likely both in professional roles and wouldn't need a 100% mortgage and the advisor AGREED with him.
> 
> False advertising i say.  You won't get that type of misleading info in the credit union.



Dear Margie

The Bank was perfectly correct, and probably saved your friend serious heartbreak going forward. Banks obviously have criteria which must be met, stricter for 100% Mortgages, and just as well. 

Imagine the heartbreak and stress which happens when the Mortgage cannot be repaid. People and Banks have a duty to be be realistic with loans which are secured on property, your home. [broken link removed] that Joint borrowers must have an Income of €80k.

Also, CU's are not that generous with defaulters, see [broken link removed] for a report from 2004, which shows them second only to BoI in persuing defaulters through Court Judgements.



> The Revenue Commissioners are the top plaintiffs in Ireland and have been awarded judgments totaling €137m. The biggest user of the courts is Bank of Ireland who won judgments against 10,444 customers for debts totaling €57m.
> 
> Credit Union are the second biggest users of the court endeavouring to force clients to pay monies owed. Credit Unions brought 8,327 people to court and were awarded €49m in judgments. Other top 20 court users include AIB, Eircom, Ulster Bank, Independent Newspapers, Everyday Finance and the ESB.



For the OP _5Times_, hopefully you have taken the steps outlined by me in an earlier post to escape from the clutches of the evil CU   

(I jest, as a long time member of both my local and occupational CU)


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## 5Times

gotsomenow said:


> Oh! :-S
> 
> 12.5%%%% (On a reducing balance, whatever that may be).


 
Whats a reducing balance?? I borrowed 40k and according to the contacts when im finished paying I will have paid back 79k in total. Am i insane or is this normal.

5times


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## Margie

irishpancake said:


> Imagine the heartbreak and stress which happens when the Mortgage cannot be repaid.


 

Any of my friends including myself that have 100% mortgages are not earning over €80000 p.a.


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## Margie

5Times said:


> I borrowed 40k and according to the contacts when im finished paying I will have paid back 79k in total.
> 5times


 
That sounds completely off. You're saying that you have to pay back altogether over double what you borrowed. no way.


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## 5Times

I'll upload it here tomorrow with all the personal details blanked out, and we'll see if im wrong, which I could be !


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## Margie

40,000 borrowed at 640 per month over 7.58 years:

total repayment  57,976.86

total interest  17,976.86


I went onto a credit union website and this is what I got off their calculator

it might help


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## gotsomenow

Margie, I think I used the same calculator you just did?  It is way out though as they say something like 10.4%, infact it shows I would be paying 400 per month instead of 600.


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## ClubMan

5Times said:


> Whats a reducing balance?? I borrowed 40k and according to the contacts when im finished paying I will have paid back 79k in total. Am i insane or is this normal.
> 
> 5times


Over how many years? See earlier posts for guesstimates as to your rate based on an assumed term of 8 years.


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## ClubMan

gotsomenow said:


> Margie, I think I used the same calculator you just did?  It is way out though as they say something like 10.4%, infact it shows I would be paying 400 per month instead of 600.


Misleading info from the _CU_? Surely not! I'm sure that the also give out loans to anybody who asks unlike the evil banks...


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## Elphaba

Banks are cold and impersonal and often very frustrating to deal with.
Credit unions more friendly, definately a better service. Being able to borrow 3 times your savings is a good solid foundation for a loan,with your savings acting as a cushion for your debt. You're also paid a dividend on your savings at the end of the year. However I dont think borrowing 40k from C. union makes sound financial sense at 12%? They're good for small amounts around xmas, holidays etc. My son was surprised however when he was taking out a small loan when he was asked to nominate someone
to leave his money to if he dies....He says...I'd rather not answer that thanks very much!!! Anyway, their interest rates are a bit on the high side, but you'll always have your savings, and at least get to know someone there. The staff are always changing at my local BOI. Not surprised, as they are just paper pushers.


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## ClubMan

Elphaba said:


> Banks are cold and impersonal and often very frustrating to deal with.


Not in my experience.


> Credit unions more friendly, definately a better service.
> 
> ...
> 
> Anyway, their interest rates are a bit on the high side, but you'll always have your savings, and at least get to know someone there.


 Fair enough if some people want to pay over the odds just to be greeted by a smiling face or to make friends but the least they could do is to avoid recommending it as some sort of generally prudent strategy for the majority.

By the way - I have banked with _PTSB _for probably 15 years now but have only needed to visit the branch office about once in each of those years. While I had my mortgage with _EBS _I probably visited them about once a year for 6-7 years. I don't really notice who has come or gone and don't really care to be honest.


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## ontour

The point is that you have found a bank, PTSB, that provide you a good service  and I am sure that there are people that will also sing the praises of AIB or BOI.  Some people like the credit union and for some people it is the cheapest form of credit available.  People should evaluate all the criteria...cost, service, flexibility, product offering etc when purchasing financial services.  After adequate research, a person deciding to use the credit union does not automatically make them a person that is 'paying over the odds'


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## ClubMan

ontour said:


> The point is that you have found a bank, PTSB, that provide you a good service  and I am sure that there are people that will also sing the praises of AIB or BOI.


I was not "singing the praises" of _PTSB_. I'm happy enough with them though.


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## ClubMan

Let's see what sort of good value _CUs _offer their members in terms of pensions now that they are going to be allowed to sell them. I'm sure that they'll do better than the 5%/1% charging limits on standard _PRSAs _since they're so friendly...

Credit union pension rules eased - RTÉ News 9th March 2007


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## Crugers

> Let's see what sort of good value _CUs _offer their members


It seems that CU's will only act as recruiting sergeants for Eagle Star qualified financial consultant introductions. PRSA's are to be offered to CU members on a no commission basis.
Commissions would arise if "protection products" are sold!


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## Elphaba

Fair enough if some people want to pay over the odds just to be greeted by a smiling face or to make friends but the least they could do is to avoid recommending it as some sort of generally prudent strategy for the majority.

Its called customer service! You make me sound like a sad loser, who shops for friends and loans, holding a placard for the CU. 12% on a loan of 
1200 with 400 in savings isn't a big deal. Just cause you make rare appearances at your bank, doesn't mean that there is not a need/demand for good one on one service in banks.


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## ClubMan

Elphaba said:


> 12% on a loan of
> 1200 with 400 in savings isn't a big deal.


It's not a good deal either.


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## jake108

Margie said:


> i was simply making the point that they are far more fair with the ordinary person than the bank.
> 
> i have never experienced any troubly with the credit union and obviously i wasn't suggesting that people should get top up after top up. You need to borrow wisely and as with any loan you need to have a good head on your shoulders.
> 
> i also think that people who have had a bad credit history and are now trying their best to get back on their feet deserve a chance.


 
I agree. The interest rate I pay in my cu is higher that Tesco etc but I love the fact that I can pay different amounts whenever I choose. At the moment I'm paying it off at almost twice the required amount to clear it quicker. I have a very good track record with mine and have had no problems getting loans. It's worth it to me to pay that little bit extra. My cu is 8.9%.


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## RainyDay

jake108 said:


> The interest rate I pay in my cu is higher that Tesco etc but I love the fact that I can pay different amounts whenever I choose. At the moment I'm paying it off at almost twice the required amount to clear it quicker.


You can make additional early repayments for any variable rate bank loan, and even some fixed rate loans (including Tesco).


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## jake108

RainyDay said:


> You can make additional early repayments for any variable rate bank loan, and even some fixed rate loans (including Tesco).


 
I'm very aware of that but you can't choose how much you want to pay from month to month. CU's are extremely flexible.


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## RainyDay

jake108 said:


> you can't choose how much you want to pay from month to month.


Yes, you can - with just a little bit of forward planning. Negotiate your loan for the minimum repayment that you are going to be able to make, and top this up with additional payments as suits your budget.


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## Headachecity

Margie said:


> That sounds completely off. You're saying that you have to pay back altogether over double what you borrowed. no way.


 
Yes we do Marie..by the way I'm the wife!.


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## njd

*Credit Union Loans and Interest Rates*

I am about to buy a second-hand car up in the 00's - I applied to my CU to borrow 10 grand (about as much as I can ask for based on my shares) and that's only for a '01 or '02 car at a push! They are quoting 8.9% interest meaning I'd have to pay back 55euro a week.  I borrowed from them before in 2001 and paid off entire loan within months.  I am already paying off a loan with Bank of Ireland because I managed to get overdrawn and so I didn't like to ask them for another loan! I find it embarrassing enough to have gone into the red and to ask for a loan for rescue!   I read Margie's comments about the CU and found them reassuring.   Are they the best ones to stick with? or is it better to go for car finance with a car dealer?  My man was encouraging me to borrow 10 grand out of the CU straightaway (some of it cash) so I'd be in a better position to buy a car if I spotted one at the weekend.


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## ontour

a friend recently did the comparison for a car loan and ended up borrowing from Tesco.


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## Margie

njd,

my opinion would be to go with the credit union.  a lot of people get into trouble with car finance companies.  their interest is also very high and you cannot be flexible with paying a little extra off the loan when you can afford it.  also, each of these companies are registered with the irish credit bureau so if you miss one payment it is recorded.


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## ClubMan

Some lenders offer cheaper rates than many _CUs_. Also an increasing number of _CUs _lodge details with the ICB these days.


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## RainyDay

Margie said:


> a lot of people get into trouble with car finance companies.


Quite a few people get into trouble with CUs as well. THey will pursue you for outstanding debts. One of Eddie Hobbs 'Show Me The Money' programmes a couple of years back featured a young lady who's CU had sought a commital order to send her to jail for unpaid debts.


Margie said:


> their interest is also very high


Not necessarily - my mother-in-law got about 8% APR from a finance company recently which was cheaper than the best offer from her bank.


Margie said:


> you cannot be flexible with paying a little extra off the loan when you can afford it.


Not necessarily - some finance company loans offer flexible payments.


Margie said:


> also, each of these companies are registered with the irish credit bureau so if you miss one payment it is recorded.


Some CUs are registered with the ICB too.

You need to do your research and check out your options.


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