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Quick Question - Credit Union Loan

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  • 20-01-2014 11:47pm
    #1
    Degag
    Registered Users Posts: 9,972 ✭✭✭


    Hi all,

    I have a credit union payment due next week, but I could do with not paying it this month. I am ahead of schedule with the loan to the tune of about 1000e so I will still be ahead of it even if I miss the payment.

    Question is, even though I am ahead of the payment, do I still have to "honour" my monthly payment?

    Thanks guys.


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    #2
    BuffyBot
    Registered Users Posts: 24,924 ✭✭✭✭BuffyBot


    Without prior arrangement the payment would be due. Contact the CU asap and they might be able to arrange something.


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    #3
    glic71rods46t0
    Closed Accounts Posts: 1,074 ✭✭✭glic71rods46t0


    BuffyBot wrote: »
    Without prior arrangement the payment would be due. Contact the CU asap and they might be able to arrange something.
    ehh....no! This is incorrect. Your loan agreement with the credit union is simply a contract. You have a contractual obligation to make payments as per the payment schedule given to you at the start of the loan. If you are ahead of schedule then you can hold off on payments whenever you want as long as the loan doesn't go into arrears. You might want to make some small payments to avoid the interest to clock up as you can't prepay interest (just principal)


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    #4
    BuffyBot
    Registered Users Posts: 24,924 ✭✭✭✭BuffyBot


    It really depends on what set up the CU has, and the way the payments are structured so you can't really say that definitively. In some cases you're ahead on payments it doesn't necessarily reduce the payment frequency, just the shortens the amount of overall payments. That's why it's always good advice to check with the institution involved.


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    #5
    glic71rods46t0
    Closed Accounts Posts: 1,074 ✭✭✭glic71rods46t0


    BuffyBot wrote: »
    It really depends on what set up the CU has, and the way the payments are structured so you can't really say that definitively. In some cases you're ahead on payments it doesn't necessarily reduce the payment frequency, just the shortens the amount of overall payments. That's why it's always good advice to check with the institution involved.

    ehh...no (again:eek:). A contract is a contract is a contract not some wishy washy thing made up in someones head. This is surely a forum for serious advice not some random waffle?
    the loan contract is very straight forward, you are either up to date with it or not. If you are, then nothing can be recorded against you on the ICB and the CU can't bring you to court for being in default ...simples....OP you are in the clear, no problem while you are prepaid but it would be a good idea to pay the interest as it accrues


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    #6
    dobsdave
    Closed Accounts Posts: 1,814 ✭✭✭dobsdave


    OP, there is only one way to find out what way your credit union will treat a missed payment.
    Until you contact them, you won't know 100%.


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    #7
    glic71rods46t0
    Closed Accounts Posts: 1,074 ✭✭✭glic71rods46t0


    dobsdave wrote: »
    OP, there is only one way to find out what way your credit union will treat a missed payment.
    Until you contact them, you won't know 100%.

    The whole point of someone coming on here is to get advice regarding their position rather than relying on the "mercy" of their lender. Its a simple contract. The Op says he/she is ahead of contractual payments - if he/she wants to miss some then there is nothing that the lender can do. My advice is to make some small payments to ensure the interest is paid and evryone should be happy - but even if the cU is unhappy, they can do nothing


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    #8
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    Fencer what exactly are you basing your comments on rather than your belief that "a contract is a contract is a contract"

    a loan contract isn't as straight forward as you'd like to imply. A loan includes a payment schedule indicating how much and how often in frequency certain payments are to be made. There is flexibility built in to overpay but there isn't the flexibility to arbitrarily decide when and how much you want to pay and when you don't want to.

    Can the OP just ignore this payment this month - yes
    Will the CU be overly concerned given they have been overpaying - No

    However its highly irresponsible to just tell somebody to not bother paying. The mature approach is to contact your lender explain the situation and mutually agree on what is or isn't going to be done.

    Also its perfectly legal for a CU to register a missed payment in your ICB record even if you are not in arrears although unlikely they would do so. Its highly irresponsible for you to mention on here otherwise and you have no recourse to have such a record removed if they do so.

    Oh and before you call my post "random waffle" I called the ICB on 01 2600388 and asked them what could happen in this situation. Id trust them over you.


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    #9
    dobsdave
    Closed Accounts Posts: 1,814 ✭✭✭dobsdave


    hg8tzk2sxc75fi wrote: »
    The whole point of someone coming on here is to get advice regarding their position rather than relying on the "mercy" of their lender. Its a simple contract. The Op says he/she is ahead of contractual payments - if he/she wants to miss some then there is nothing that the lender can do. My advice is to make some small payments to ensure the interest is paid and evryone should be happy - but even if the cU is unhappy, they can do nothing


    Wouldn't you need to see the contract before giving definitive advice?
    I would personally talk to the other party in the contract and then make a decision.
    Or you could do whatever you want and see what happens afterwards.


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    #10
    chasm
    Registered Users Posts: 2,083 ✭✭✭chasm


    OP i would agree with other posters here who suggest you talk to your CU.

    Any payments made above the scheduled payments are classed as being in addition to your payment schedule and cannot replace the agreed weekly payment. It does reduce the balance and interest owing and therefore the loan will be paid off before it is due but unless agreed beforehand with the CU you would be better off not missing the payment.


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    #11
    glic71rods46t0
    Closed Accounts Posts: 1,074 ✭✭✭glic71rods46t0


    D3PO wrote: »
    Fencer what exactly are you basing your comments on rather than your belief that "a contract is a contract is a contract"

    a loan contract isn't as straight forward as you'd like to imply. A loan includes a payment schedule indicating how much and how often in frequency certain payments are to be made. There is flexibility built in to overpay but there isn't the flexibility to arbitrarily decide when and how much you want to pay and when you don't want to.
    A contract is very straight forward. The payment schedule specifies the expected payments and the time they must be paid by. So if the OP has overpaid the loan they are further aslong the payment schedule than they need to be so they are perfectly entitled to miss some payments and still be in compliance with the contract - you and some other the loan posters seem to think that a loan contract isn't straight forward. It is very straight forward, if you are ahead of schedule you can miss payments so that the schedule catches up to where you have paid the loan up to. The only caveat I added was the desireability to make some small payments to keep interest from clocking up (you cant prepay interest).
    D3PO wrote: »
    Can the OP just ignore this payment this month - yes
    Will the CU be overly concerned given they have been overpaying - No
    I think we both agree on this
    D3PO wrote: »
    However its highly irresponsible to just tell somebody to not bother paying. The mature approach is to contact your lender explain the situation and mutually agree on what is or isn't going to be done.
    Nothing irresponsible about what I said. The mutual agreemnet was made when the loan was taken out and the loan schedule was agreed. If the OP has exceeded the payments on the schedule they can stop paying until teh schedule "catches up"
    D3PO wrote: »
    Also its perfectly legal for a CU to register a missed payment in your ICB record even if you are not in arrears although unlikely they would do so. Its highly irresponsible for you to mention on here otherwise and you have no recourse to have such a record removed if they do so.

    Oh and before you call my post "random waffle" I called the ICB on 01 2600388 and asked them what could happen in this situation. Id trust them over you.
    Very simply, the ICB records arrears on loans. A credit union system will generate a report for all their loans automatically on a monthly basis. It only looks at contractual arrears and will report a clean slate for the OP as long as the loan is ahead of schedule. Your assertion that the ICB will show a missed payment is simply untrue.
    You rang some customer service agent in the ICB and got an incorrect answer. Lenders cant arbitrarily decide what to report to the ICB - they can only report on arrears and changed terms - and its done automatically. You get a footprint for 24 months with a number from 0- 9 Theloan will show a profile of being up to date as the ICB reports on contractual arrears - your post was not random waffle, but it is incorrect and misleading all the same


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    #12
    chasm
    Registered Users Posts: 2,083 ✭✭✭chasm


    hg8tzk2sxc75fi wrote: »
    The mutual agreemnet was made when the loan was taken out and the loan schedule was agreed. If the OP has exceeded the payments on the schedule they can stop paying until teh schedule "catches up"

    This is not how my CU operates. Any payment made over the agreed amount is used to reduce the balance and thus reduce the amount of interest, but you are still obliged to pay the weekly amount agreed at the time of taking out the loan. The number of repayments reduces due to this "overpayment" but you are still obliged to pay the amount agreed on a weekly/monthly basis until the balance reaches zero.


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    #13
    glic71rods46t0
    Closed Accounts Posts: 1,074 ✭✭✭glic71rods46t0


    chasm wrote: »
    This is not how my CU operates. Any payment made over the agreed amount is used to reduce the balance and thus reduce the amount of interest, but you are still obliged to pay the weekly amount agreed at the time of taking out the loan. The number of repayments reduces due to this "overpayment" but you are still obliged to pay the amount agreed on a weekly/monthly basis until the balance reaches zero.
    It may be custom and practice in your CU but it is unlikely to be a contractual obligation to do so


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    #14
    BuffyBot
    Registered Users Posts: 24,924 ✭✭✭✭BuffyBot


    TBH No one asked about that, and it's getting tiresome so unless you have something concise and directly relevant to the OPs question don't post in this thread again.


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    #15
    Degag
    Registered Users Posts: 9,972 ✭✭✭Degag


    Thanks for all the replies. I will check with the CU going forward on this but in any case it will be ok this month, will just be paying 2 or 3 days late I think which should be fine. It was just the way my wages were falling this month that made payment awkward on the exact date payment was due.


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