Key Post How to set your Credit Union shares against your loan

How about asking the CU to take on the credit card balance? I have done that a few times if I had a good gut feeling that the member would be responsible and not run up the balance again. Having 1 less payment might help the cashflow - the CU loan term could be extended allowing teh payment amount to remain the same. Might be worth a shot?
 
Tried that earlier in the year but it wasn't a runner. Just for some background here are some rough figures (perhaps should be in Money Makeover?!?)

Mortgage


  • €231K over 25 years starting January 2010
  • Introductory 2 year fixed rate of 2.56% (?) ending January 2012
  • €223K and 23 years outstanding
  • On 6 month interest only repayments since June 2010 €490 p.m.
  • TRS never claimed at the outset so 2010 lump sum of €1.5K came back earlier in the year and used to reduce CC debt; and the full year of TRS for 2011 is being paid September-December 2010 at a rate of €340 p.m. so net interest only repayment currently €150 but that is obviously going to change in new year when rate goes up and TRS goes down
  • If TRS was not being backdated right now then interest only repayment would be €370
CC


  • €2K+ balance down from about €7K at start of year
  • Interest charged is c. 22% on past cash advances and 15% on past purchases
  • Interest charges c. €60 p.m. I think
  • Other than some minor transactions (c. €10 p.m.) the card is not being used any more
  • Haven't been able to find a 0% or lower interest balance transfer option to date
CU loan


  • €11.5K @ 8.69% over 66 monthly repayments starting early 2011
  • €3K in shares
  • Effective rate of borrowing given a dividend last year of 2% seems to be about 11.5% by my rough reckoning
  • c. €10K outstanding and about 59 repayments left
  • Monthly repayment €215 via payroll
  • Share lodgement €10 p.m. (but being terminated soon)
  • CU have said that c. €600 (or whatever the excess of shares over 25% of the loan I presume) may be offset against the loan subject to board decision and if this happens the monthly repayment will drop to €180
Income


  • c. €2K net salary p.m.
  • €140 child benefit
  • €500 child maintenance

Outgoings


  • I haven't listed the outgoings and household related costs but many of them have been pared back significantly since the start of the year.
  • In particular stuff like mortgage protection life insurance, home insurance, car insurance, phone etc. have been replaced with lower cost alternatives
  • However things are still quite tight and current a/c overdraft facility is sometimes still used temporarily

Also some tax issues have been dealt with which should yield some refunds.
 
Just with the difficult financial times that are in it at the moment;

I thought that it would be helpful to re-post this subject. I have recently requested shares to be withdrawn in cash in the context of the credit union Act. My local CU had no issue with my request, although it does take a little longer for a decision to be made.

http://www.askaboutmoney.com/showthread.php?p=1192336#post1192336

''Hi All,
Just coming back on this subject. I reveived my response from my credit union today regarding withdrawing funds whilst maintaining a share to loan value at 1:4. The request has been approved by the board with no conditions.
Again, this is not to be confused with the 'setting off' process where you transfer shares against your loan with the permission of the credit committee, but from speaking to them, this could be an option that they are open to also.

I believe I was in quite a good position to make this withdrawl as I had the same amount in shares as I had remaining on the loan when I made the request.
The legislation surrounding the credit unions is quite consumer focused and does seem to uphold the interests of the credit union members.''
 
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