Credit Union Loan - but don't need it!

another question

Hi,

This is a weird question I know but has anyone ever taken out a loan with the CU and not needed it?

I was going to use the money as a kind of current account booster or savings account booster if you know what I mean.

I have a share account like most in the CU and have had one loan in the past that I repaid early...I know how much I can afford to take out and repay in the short time span, that isn't a problem but I just would like to have a sum of money available (sitting) in my current account. Does this make any sense or is it a stupid idea?

It's kind of a backwards way of saving...as I get a monthly salary and can repay the loan but I'll have the money from the outset and after I have the loan repaid?

I thought it was a good idea when I was discussing it with someone else who has done it and then I spoke to someone else who thought it was the most ridiculous thing he had ever heard! So now I'm confused...any opinions are much appreciated.

mel.b

I get where you are coming from. One of my big regrets is not taking someones suggestion of getting a personal loan for €20000 a few years ago when the exchange rate to australia was €1=$2. With the crappy exchange rate now and the high deposit interest rate in Oz i would have doubled my money. Hindsight is a wonderful thing though! And even if the fx hadn't fallen in my exchange iwould still have the moneyin an account in Oz, where i am from orginally.

Anyway, back to your post. If you are good at not spending and the money sitting in your account wouldn't be a temptation, then maybe go for it if you can get a loan. Maybe then put the money into a restricted access account so you can't access it to blow on a holiday. Be caredul thoughnif you are planning on using it as part of a house deposit as you will still be questionned about the source of the funds and the bank might not like the answer? Also the intrest on the CU loan will cost you more than you will earn from it being on deposit so it will actually cost you money to do it this way rather than the hard but gratifying slug of saving.

chris85

I'm not trying to be personal but it's a terrible idea getting a loan to boost savings. It's just for your personal ego to see your savings balance high yet you will be in debt by the loan. The loan will have a higher rate of interest than the savings account and thus doesn't make financial sense.

hognef

another question wrote: »

Hi,

This is a weird question I know but has anyone ever taken out a loan with the CU and not needed it?

I was going to use the money as a kind of current account booster or savings account booster if you know what I mean.

I have a share account like most in the CU and have had one loan in the past that I repaid early...I know how much I can afford to take out and repay in the short time span, that isn't a problem but I just would like to have a sum of money available (sitting) in my current account. Does this make any sense or is it a stupid idea?

It's kind of a backwards way of saving...as I get a monthly salary and can repay the loan but I'll have the money from the outset and after I have the loan repaid?

I thought it was a good idea when I was discussing it with someone else who has done it and then I spoke to someone else who thought it was the most ridiculous thing he had ever heard! So now I'm confused...any opinions are much appreciated.

I don't get it. If you don't need the money now, why not wait until you do? It would seem foolish to take out a loan unless you have a very specific reason for doing so--for example, like the 1st response said, to invest it in something with a potential to grow by more than the cost of the loan. Or, if for some other reason you think the benefit to you would outweigh that cost.