# Credit union advice shares of 3k loan of 5k



## Markdub (31 Oct 2013)

I took out a credit union loan about 5 years ago for 15k for a car, I topped it up a year later to 23k to clear off my credit card debit.

I paid off approx. 8 - 10k a year and kept saving with them.

I now have 3,000 in savings and 5,000 left on my loan.

September last year, I was facing dire financial difficulty, my wife left me and I needed extra cash to pay the mortgage. At that stage I had 13,000 of a loan and about 2,000 in savings.

I asked the credit union to reschedule my loan slightly (by about 6 months) to allow me to pay the shortfall in the mortgage due to my wife's departure.

They refused on grounds that I had not submitted my partners financial details and statements, which weren't available to me. 

I hadn't submitted any of her details to get the loan nor had she co-signed or acted as guarantor.

Payments were made by salary deduction, when I tried to stop them, payroll refused - citing that only the credit union could stop them (and informed that this had already been legally tested in the labour court!)

I raised a complaint with the financial services ombudsman, which went on for a protracted 8 months, however in the end he sided with the credit union, citing its right to obtain a full suite of information! 

(The credit union had already obtained an ICB credit report on me, it had my full financial details and it had full knowledge that I had never defaulted on a payment!)

All I wanted was for them to take their foot off my throat for a few months and allow me to breathe!! 

Anyway that's in the past, I managed to struggle by and the loan is about complete with just under another 2.5 months left.

I never want to deal with these guys again and as soon as the loan meets the share balance I want them to wipe the loan and close the account.

Last month my loan met their 50% criteria and I've just 2,000 of a gap between my savings and my loan. (3k savings and 5k loan).

My payroll deduction is split 7:3 with the 3 part going into shares, with the 50% criteria exceeded, can I now instruct them to direct the entire payment to the loan and to close the account when the loan meets the share balance?


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## Crugers (4 Nov 2013)

First point I'd make is that the above sums don't add up...
If you had a loan balance 4 years ago of 23k and repaid 8k per year it would have been repaid in 3 years - but you have a balance of 5k left after 4 years...

Second point - "_Payments were made by salary deduction, when I tried to stop them,  payroll refused - citing that only the credit union could stop them (and  informed that this had already been legally tested in the labour  court!)_" I would be very interested in how the Labour Court has any jurisdiction over a contract between you and your credit union... I believe your 'payroll' are being a little economical with the truth and would expect, if push came to shove, that they wouldn't have (m)any legs to stand on in a court of law!

I'm not sure what "_their 50% criteria_" means but I guess that you are a member of an organisation- the CU - who has rules/policy as to how they conduct business. If you want to be a member of that club you have to follow their rules/policy!
"_...can I now instruct them to direct the entire payment to the loan..._". You can only try! But from what you have indicated previously they don't appear to want to facilitate you, their member. To say the least - odd behaviour for a co-operative! The 70:30 /  repayment:savings split does mean you will pay more interest than if they applied the whole amount against the outstanding principal. That is not in your best interest! But it may be their policy! If it is then, cest la vie!

Worse case scenario your savings will grow to meet your declining loan balance and at that stage you will be perfectly entitled to insist that the CU apply your saving balance against your outstanding liability!


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## Brendan Burgess (4 Nov 2013)

Mark

That is an extraordinary story.

Are you saying that today, you have a loan of €5k and shares of €3k? 

What interest rate are you paying on your loan? 
What interest are you getting on your shares? 

Have you asked them to set the €5k against the loan to reduce the net loan to €2k and reduce the interest you pay by around 60%?

Brendan


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## Slim (4 Nov 2013)

Brendan Burgess said:


> Have you asked them to set the €5k against the loan to reduce the net loan to €2k and reduce the interest you pay by around 60%?
> 
> Brendan


 
@Brendan, Mark only has €3k to set against a loan of €5k. Standard Credit Union rules would only allow savings to be reduced to a min of 25% of loan balance. 

@Mark, as fo the salary deduction, it is entirely up to the member as to the split. Call in or phone and ask a teller to make a note that 100% of your payment is to go against the loan. ... these credit union staff or directors are usually following rules and there may be more to your history with them than we are getting here. You have every right to resign your membership after you have repaid the loan in full.

You can also attend AGM which may be coming up soon and complain about the policies or rules there. There is also a Complaints Procedure in the CU which you should use to make the complaint in relation to your own case.


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## ClaireM (4 Nov 2013)

Your payroll department are in breech of the Payment of Wages Act 1991 if they continue to make a deduction from your salary after you have instructed them not to.

Write them a letter telling them to stop the deduction.

http://www.citizensinformation.ie/e...d_conditions/pay_and_employment/pay_slip.html


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