Advise Needed On Whether Or Not To Top Up A C.U. Loan?

H

heretohelp

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Hi guys,
Need a little advise, story is as follows:
  • We have a 30k credit union loan of which we are paying 400 euro monthly off. We also have a bank loan of which 6300 euro is outstanding . A credit card which we pay 100 euro weekly to bring down as soon as possible and hope to have clear by june when our baby arrives.
  • The credit union loan was originally almost 60k over 10 years. In August we repaid 24k off it and renegotiated the loan.​
  • I went in yesterday and enquired about topping up the loan by about 8k to enable us to clear the bank loan and credit card and was told i still had 9 1/2 years left on the original loan, i was a little taken aback as i assumed that since our loan was taken out in 2007 i had around 8 years, or just under left on it.​
  • Anyway, If i top up the loan the CU put it over 5 years and the new repayments would be 800 euro a month.​
  • The way i see it is, i pay 400 cu, 200 bank and 400 credit card monthly at present which is 1000euro. So in the short term it would be better to opt for the 5 year option. BUT, I would have the credit card paid off in june the way im going, yet there is wtill three years left on bank loan . I just want to clear things as quick as i can , so sorry for the long post can anyone advise ?​
 
It will cost you more to put the credit card onto the loan than it will to pay it off by June.

I would leave the credit card debt out of any top up.
 
Do you not have a copy of the terms and conditions when you renegotiated the loan? This should tell you what the term of the loan is.

You should only consolidate if it doesn't mean you will just start new bank and credit card debt again thus defeating the purpose of consolidating.
 
Bronte said:
Do you not have a copy of the terms and conditions when you renegotiated the loan? This should tell you what the term of the loan is.

You should only consolidate if it doesn't mean you will just start new bank and credit card debt again thus defeating the purpose of consolidating.
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yes just found it, i assumed the loan was just renegotiated over the term i had leaving about 8 years, its my ive cut them own fault, i assumed rather than checking. Your right about the credit card debt, ive cut them up wont be using them again. I have been sitting here doing my finances and realise i have 200 euro a week to put off a loan but wonder should i continue on the way i am clearing the credit card debt monthly ,and pay this extra 200 euro off the bank loan if they allow it , then i would have it clear by august , instead of 3 more years? Then focus on th credit union loan, all the while leaving the credit union repayments at 400 euro monthly ?
 
1. The interest rates you are paying should influence which loans you move.
2. Consolidating and reducing monthly repayments often has the effect of increasing the overall cost to you in the long term.

Can you move the credit card balance to a provider with a 6/9 months interest free introduction period and pay it off over that time?

You should also validate that the credit union is the best place to obtain the loan from. It might be worth at least talking to the bank to see what they have to offer especially if the loan can be secured against property.
 
stay as you are i say, the credit union interest rates are a lot higher than the bank, i would clear the credit card first
 
I think you should pay off your highest interest debt first, presumable your credit card. Do you know what interest rate you pay on each debt? Do you know if there are penalties if you pay the bank loan back. These are the things you really should be getting to grips with. But a good start was with cutting up the credit card - well done.
 
babyspice said:
stay as you are i say, the credit union interest rates are a lot higher than the bank, i would clear the credit card first
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The OP does not state the rate on each loan, so how would anyone know this from what is posted here?
 
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