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Using savings against a loan in the credit union

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  • 13-07-2008 4:21pm
    #1
    Random
    Closed Accounts Posts: 19,080 ✭✭✭✭


    I will ring and ask my CU during the week but just wanted to know anyones experience.

    Say I have 6k in savings in the Credit Union. Then I have loans to the value of 7k. The savings are pledged against the loan as security deposit.

    When the outstanding loan value goes below that of the savings, will they generally allow you to just cancel one against the other?

    Is there any downsides to this?


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    #2
    Lizzykins
    Closed Accounts Posts: 637 ✭✭✭Lizzykins


    Yes I've done this a number of times. Savings/shares 6k, loan 4k. Put 2k off loan. Result loan paid off earlier and good savings on interest paid on loan. I wouldn't use all the savings to clear the loan because then you don't have as much leverage raising another loan.


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    #3
    Random
    Closed Accounts Posts: 19,080 ✭✭✭✭Random


    But what if the loan amount is higher than the shares amount ?


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    #4
    romah
    Closed Accounts Posts: 150 ✭✭romah


    What you are saying random is that you have 6K savings tied up ...but owe the credit union 7K ..

    You are probably looking at 7K and thinking you really only owe 1K.

    Throwing all your savings against a loan isnt a good idea ..lizz said it and I agreed .think about what loans you might need in the future ?

    Credit Unions can be flexible.. ask about transferring maybe half of your savings against your loan so you still have 3K in savings and looking at paying 4K in loan (this will also reduce your repayments on a weekly basis and help your cash flow..)
    Remember getting more difficult to borrow from banks these days I hear ..so keep your credit union sweet..


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    #5
    Random
    Closed Accounts Posts: 19,080 ✭✭✭✭Random


    I'm not saying I have xyz .. I'm asking a question but you have the jist of the question yah.

    6k savings. 7k loan. i.e. only 1k (plus interest) debt. No ? I know you say all the savings tied up but that's how I see it glancing at it.

    I guess it can be done (paying some savings off a loan) then, even if savings (shares.. or whatever we call them) are less than the loan amount.


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    #6
    GerardKeating
    Registered Users Posts: 7,650 ✭✭✭GerardKeating


    random wrote: »
    I will ring and ask my CU during the week but just wanted to know anyones experience.

    Say I have 6k in savings in the Credit Union. Then I have loans to the value of 7k. The savings are pledged against the loan as security deposit.

    When the outstanding loan value goes below that of the savings, will they generally allow you to just cancel one against the other?

    Is there any downsides to this?

    Generally they tend to advise against this, you ability to borrow with them is related to how much you have saved and for how long.

    Also, are you a good saver. if you leave it as it stands, you will have 7K in the bank when the loan is cleared. if you use the saving to clear the loan, you might end up in a few years with no loan and no saving, if you do not save well.


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