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good news at last

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  • 05-02-2011 2:13pm
    #1
    Farrahy100
    Closed Accounts Posts: 19 ✭


    Imagion my relief.

    All this talk of banks not lending.

    Our credit union has written to us to say we CAN borrow.

    If we deposit €5.000 they will lend it back to us, over three/five years, at a mere 5%.

    Regrettably, our credit union is not able to pay any interest on deposits.

    Should we be so bold as to touch any of the €5.000 during the period of the loan, well then the interest rate on our own money goes up to 9.5%.


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    #2
    dudara
    Registered Users Posts: 33,518 ✭✭✭✭dudara


    Moved to Banking & Insurance & Pensions

    dudara


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    #3
    daigo75
    Registered Users Posts: 389 ✭✭daigo75


    I'm not sure I understand: you can give them 5000 Euro, and they won't give you any interest. For this "privilege", you can get back exactly your 5000 Euro, and pay interests on them?

    Am I missing something? :confused:


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    #4
    john_cappa
    Registered Users Posts: 1,371 ✭✭✭john_cappa


    daigo75 wrote: »
    I'm not sure I understand: you can give them 5000 Euro, and they won't give you any interest. For this "privilege", you can get back exactly your 5000 Euro, and pay interests on them?

    Am I missing something? :confused:

    I think you are missing the undertones of sarcasm in the op (i hope they are being sarcastic).

    A terrible deal.


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    #5
    Farrahy100
    Closed Accounts Posts: 19 ✭Farrahy100


    Insane as this may sound, it is true. Any saver with €5.000 or more in the credit union will be lent €5.000 at an interest rate of 5%.

    So, their ARE lending you YOUR OWN money.

    People are actually going for this deal. They think that they are getting a loan without touching their savings. That is the way this is being sold to them. But, as you cannot touch you €5.000 until the loan is repaid (or the interest rate goes to 9.5%) this deal makes no financial sense at all. People could withdraw their €5.000 and use it. They could then save the €5.000 by putting a small sum away each month/week so they saved €5.000 over the time of the loan. Saving all of the 5%. Several hundreds of euro.

    The Credit Unions lost so much money that they have become just another financial predator. The fact that they have built up trust is being used in a very cynical way with the selling of this form of loan.


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