Credit union Question

[Gary 23]

Hi

I have a question about credit union loans that i hope somebody can help me with. At present we have a loan of 25000 with the credit union for a deposit for a house. we have been paying it off for about 6-7 months at a variable rate (usually around 7.5-8.5%) of 526 euro every month and have only made a dent of just over 2000 in it.

Would it be a better idea to apply for a loan with a fixed rate in a different bank or would staying with the credit union be a better idea bearing in mind that i now have an extra 100 euro from a second job every month and plan on putting every bit of my disposable income i can spare towards the loan in order to pay it off early?

Any help with this matter would be appreciated.

yours
gary

 

[Cashstrapped]

Hi Gary,

I've been dare, done that and have got myself in a tizzy on how to pay it off fast etc.

This is what I done although I'm sure alot of posters would not agree, but it def. suited my personal circumstances.

I went back to my mortgage provider approx 9 months after I had taken out my mortgage and applied for a Mortgage Top-Up. Most lenders will allow this once you have sufficent equity in your home and of course showing that you can make the repayments In my case my mortgage including top-ups could not be more than 80% of the value of my home although all lenders use different percentages. It is usually given at the same rate as your mortgage and you can choose the repayment terms, in my case I had a choice of anything from 5 to 25 years.

As I said this is what suited my personal circumstances at the time and I prefer to think I owe all my mortgage type debt to one financial institution than having various loans to 2/3 different lenders.

Hope this helps.

 

[ontour]

Gary, I would agree with cash strapped...two things to note...mortgage lenders systems get a bit worried when a top up is looked for within one year so if you are close to 12 months, let it roll over the 12 month period and it might go through a little easier.

The second thing is the all important part...paying off the 20 -25 grand over 20-30 years still works out a lot more expensive due to the long term nature of it. What you need to do is to increase the monthly payments as much as possible to reduce the term thereby reducing the interest..