Q about a credit union loan

shreksaurus

I'll be asking my credit union what their policy is regarding loans within the next week. But i've a question here for anybody that will know and i hope i'm going to make sense.

I hope to get a loan in the summer for a car. Will need 8000. Say for example I have 4000 euro savings in the credit union. Would I be able to put my savings towards a car, and get a loan of 4000. Or do i need to leave my savings in the account to get a loan and would these savings be frozen until I have the loan paid off.

I'm clueless and would appreciate advice.

Random

It depends on your CU but usually your savings are security against your loan. While your outstanding loans exceed your savings then you cannot take out savings.

As your outstanding loans come down as they become lower than your savings then you have to keep savings to match the loan until it's all paid off. This is how mine worked anyway.

You could always take out the 4000EUR and then ask for a loan but this probably wouldn't look great from their point of view.

You could always try for a loan for 8000EUR? 8000EUR loan with savings of 4000EUR would look a lot better TO ME than 4000EUR loan with no savings and having just taken out 4000EUR.

shreksaurus

Random wrote: »

You could always try for a loan for 8000EUR? 8000EUR loan with savings of 4000EUR would look a lot better TO ME than 4000EUR loan with no savings and having just taken out 4000EUR.

Thanks for your reply. You've made a lot of sense and i think thats what i'll do.

If I was to go with this option of taking out a loan of 8000 euro, and leave savings of 4000 euro in my account, just wondering when the majority of the loan is paid off would it be possible to maybe pay off the rest of the loan from my savings.

Random

(again, only speaking from my own experience)

Once my loan was down to the same level as my savings I paid off the loan with my savings with my credit union. No problems doing it.

I had a thread here looking for the advantages and disadvantages of doing it and in my case I felt it was wiser to just pay it off.

shreksaurus

Thanks Random for your replies. Thats fantastic. My driving test is in a few weeks time and I hope to get a Mini in the summer. Hopefully sometime in June.

trevorku

Do you think the Credit Union would give me loan for deposit on the mortgage, I need like E15-17,000. Do they have a policy on not giving loan for deposit? Also if they dont give it, would I get away with telling them its for a car? Would they actually look for proof of the vehicle purchase? I can make the repayments definitely, just matter of getting the deposit ready for the mortgage? Please get back to me guys, feel like im hitting a wall
on all this mortgage stuff.

Toots

AFAIK, you need to already have savings with the CU before they'll give you a loan, so if you aren't already saving there then you could run into problems getting a loan of that size. You'd also need to declare this loan on your mortgage application, which could affect the amount you are approved to borrow.

I don't know if the CU will give a loan for a deposit for a house. However, I wouldn't be encouraging you to lie on a loan application. If CU loan applications are anything like regular bank ones, there'll be a declaration for you to sign stating that all the information you gave in the application is true and correct.

pandamoanium

trevorku, I know that all the credit unions near me *will* look for proof that it's a car loan you're getting - in fact most of them will insist in making out the cheque payable to the Garage/Dealer you're buying the car from and will not give you a cheque to make payable to whomever you want yourself.

So no I don't think you'd get a loan for a deposit for a house by saying it's for a car loan..

Toots

Just to add, if you do lie on a loan/mortgage application, if the lender discovers this they *can* technically call in the loan because it was obtained under false pretences. It is illegal to lie on a loan application.