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Hi all, first post here, wish it could be on a more positive note.
I have just been told by my mother that she owes 8000 euro on her credit card, I am in shock at the amount, I knew she owed a grand or two but had no idea it was anywhere near this figure. She says it was mainly incurred through my sisters wedding. At the moment she is paying back 200 euro a month, which is just barely paying over the interest( 1.52% a month).
She has been burying her head in the sand regards the debt. There has to be a better option to repay it than this interest rate? annual interest rate is 1.52x 12 so 18.24% .
I have looked at credit union loan rates, and tbh I find there system a bit confusing and can't work out what there actual "real" rate of interest is?
Is the bank the best option at 11.5% per annum? Also will they lend to her, she has been a customer of B.O.I for forty years, but doesn't have much in way of savings at present maybe roughly 1000, and doesn't have any asset to secure the loan against.
Any advise would be greatly appreciated, thanks.
What is wrong with the credit union helping the mother out, they are a very nice understanding membership. It would not be bailing her out.why do you think that the credit union membership should by bailing out your mother bail out the credit card company
The effective cost of CU borrowing will not be reflected in the APR as it is with most or all other financial institutions. You also have to factor in the fact that a borrower will generally be required to keep c. 25%+ of the borrowed amount on deposit/in shares at a marginal rate of return (c. 1% in most cases). This will increase the effective cost of borrowing.Each credit union is different and can charge different rates of interest, although the maximum is 1% pm, 12.68% APR.
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