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Help with Credit union debt

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  • 24-01-2011 11:51am
    #1
    IpreDictDeatH
    Registered Users Posts: 267 ✭✭


    Hey so im in hoping someone has a bit of advice for me.

    I've got a credit union loan of about €6,000 and ive also got shares around that same figure. Ive also got a credit card bill of around €1,000. The guy in the union said it would be better for me to keep my shares and just tap away at the loan as opposed to using my shares to wipe it clean as that would make it easier for me to get another loan from them in future.
    However, i think im paying high interest on that €6,000 and im thinking of course the union are going to say that.

    I was thinking i could use my shares to wipe the loan clean, then use some of the cash i was pumping into the union to get the loan down to help pay off my credit card bill. Does that sound wise? I just dont like paying interest on all these loans. And im thinking i could put the extra cash im using at present to pay the loans into a high interest saving account, making money for me.


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    #2
    3DataModem
    Registered Users Posts: 3,997 ✭✭✭3DataModem


    Pay credit card debt before credit union debt. interest rate is likely to be MUCH higher.

    What you do in the Credit Union depends on your future plans, but I would put the entire share balance off the loan then use the extra disposable income to clear down rest of the loan and then build up share balance again over coming months.

    That way you minimise your interest loss but the downside is that you'll have no "credit history" with the CU.


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    #3
    IpreDictDeatH
    Registered Users Posts: 267 ✭✭IpreDictDeatH


    Yeah thats own line of thinking too. To be honest i only want the union account to maybe buy in a bit of furniture in the future, nothing too large. And my girlfriend has an account too which will help. I just want to change it so that the interest is working in my favour as opposed to the banks. Thanks a mill.


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    #4
    RachaelVO
    Registered Users Posts: 3,108 ✭✭✭RachaelVO


    Pay your credit card first! No question. And the guy in the credit union is right, it's better to chip away at your loan. The credit union will tailer a plan for you and then you still have your shares. No point in loosing them. In the short term that seems like a good idea, but it really isn't.

    You will be paying more interest on your credit card, so the quick you pay that back the better you will be!


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    #5
    Mort5000
    Registered Users Posts: 419 ✭✭Mort5000


    Pay CC first.

    Then, if the shares are generating income faster than the CU loan is accumulating interest, then keep the shares.

    Also, what did the shares cost?
    That may have some impact on your decision.


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