You may need to keep money on deposit/in shares while borrowing from a CU and even though this money will probably earn interest/dividends having to do this may inflate the cost of credit further while not being reflected in any APR quoted.Speak to your local credit union - rates vary. My local credit union charges 7% per annum, no charges or fees
"Free" loan protection is paid for by the CU which, as a member owned organisation, means that ultimately the members bear the cost albeit indirectly.free Loan Protection cover....
If credit union members can indeed go in to their local credit union, borrow atCredit Union loans are also personal loans, which means you own the car, and are not subjected to the adverse terms of hire purchase or lease agreements
then that is indeed a good rate, and is worth checking out. Can anyone (let's say the original poster) just walk in off the street without savings and get a loan at these rates?a rate of 7.5% APR, the true APR, after applying say a 10% Interst rebate, works out at around 6.7%. This is a good rate.
Saving while carrying debt is often not the most cost effective or prudent way to manage your money. Many CUs don't point this out to members. Some don't even understand the issues in my experience. To be fair this is no different from other financial institutions' tied agents on whom one should not depend for independent, professional advice in your best interests. On the other hand as a member owned organisation one might expect better...Credit Unions do encourage member to save and many people are quite happy to repay a loan account and also save seperately. Note, however, that this should be done in a seperate savinga account. If you use your loan account to also save money ( seems odd, I know), any savings you have in this ‘dual’ account will be used as colateral against the loan, and is hard to withdraw.
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