credit union: loan and share arrangement - possible to offset shares against loan?

If you have a loan & shares with a credit union (i.e. having needed the shares to get the loan) - is it possible to then somewhere down the line transfer the shares into the loan (leaving you with nil) in order to reduce the balance (and therefore interest) ?

I thought it wasn't allowed but just thought I'd ask.

Re: credit union question

It depends on the credit union. As far as I know some of them will not allow you to take any shares out until the share and loan balance are equal. e.g. if you have say 2k in shares and a loan balance of 2k.

You would probably be better off to keep the shares there as you will earn a dividend each year. Plus you would be reducing your borrowing power if you withdraw your shares should you require a loan in the future. Best thing would be to ask and see what they say.

Re: credit union question

A couple of years ago I reduced my borrowing to 3.5k and this was my share total. I then closed the account and restarted it a few weeks later. As I didn't need to borrow any more at the time, the requisite three months or so of building up savings didn't bother me.

Re: credit union question

Again, it depends on the Credit Union.

Most will allow you to do a partial funds transfer. For example, if you have a loan of 15k remaining and have 6k shares, you can in one month transfer say 1k from your shares to cover your arrears.

Most credit unions realize that after Christmas, some people are stretched.

They will not allow you to transfer ALL of your shares to your loan unless they match. ie: you have 6k shares and 6k remaining on your loan.

Re: credit union: loan and share arrangement - possible to offset shares against loan

Thanks - no arrears just exploring my options - looks like I'll have to leave it there for the time being.