Loan from Credit a Union or Bank?

Western Pomise

Hi all,apologies if this post is in wrong thread,

Need to get a loan of approx 10k, at the moment who are offering most competitive interest rates?...banks,Credit Unions or the Post Office?
Have some savings in a credit Union and they quoted 6.19% APR on Friday for a 5 year loan term...how would banks compare to that?

Thanks for any replies.
Ps - have a current bank a/c in credit.
Just had not chance to check out banks rates yet.

kimokanto

I have borrowed from both Banks & CU & I have a preference for CU.
Interest is charged on the diminishing balance which means quicker its paid back less interest you pay.
It's also nice to have loan paid & see that your shares (savings) have increased by the end.
I have had occasion to repay more quickly & to negotiate reduced repayments on different CU loans without any problems.
Banks I found inflexible & generally arsey to deal with.
I don't know specific rates comparison.

Western Pomise

kimokanto wrote: »

I have borrowed from both Banks & CU & I have a preference for CU.
Interest is charged on the diminishing balance which means quicker its paid back less interest you pay.
It's also nice to have loan paid & see that your shares (savings) have increased by the end.
I have had occasion to repay more quickly & to negotiate reduced repayments on different CU loans without any problems.
Banks I found inflexible & generally arsey to deal with.
I don't know specific rates comparison.

Thanks....with banks are you paying interest on the entire sum (10k ) in my case till all of loan is paid off?

kimokanto

I think Banks apply interest to balance as adjusted annually wheras CU do point in time?

newacc2015

I cant imagine a bank being cheaper than 6.19%. But you could try them.

IMO I prefer banks as they are more professional in my opinion (well AIB is). Any CU I have been a member of was a bit all over the place, where as my local AIB is a dream to deal with

IMO go with whoever is cheapest. I would go with the CU, if you can pay it off earlier with no penalty

Western Pomise

newacc2015 wrote: »

I cant imagine a bank being cheaper than 6.19%. But you could try them.

IMO I prefer banks as they are more professional in my opinion (well AIB is). Any CU I have been a member of was a bit all over the place, where as my local AIB is a dream to deal with

IMO go with whoever is cheapest. I would go with the CU, if you can pay it off earlier with no penalty

Thanks,hard to get time out of work to contact banks today so that is why I put the question up here,am with the AIB myself....for years and have an excellent credit rating so regardless where I go for loan it should be approved hopefully.

Loan is for a car...but as matter of interest do banks/credit Union etc look for evidence that you are getting loan for car purchase or just give you it once you meet their lending criteria?

Really appreciate if anyone had an inkling of typical loan interest rates from Banks at moment for 10k euro over 5 years.

Thanks again.

Spocker

AIB have an online calculator: http://personal.aib.ie/our-products/loans/car-finance#comploancalculator

10k over 5 years = Monthly Repayments: €210.30 Total amount repayable: €12,618.00

In my local Credit Union, when you apply for a loan for a car, you're charged the standard rate on the loan (10%) until you call in and produce the VLC with your name on it for the new vehicle, and then they will adjust the rate.

Using my local CU's loan calculator for the same amounts: Monthly Repayments: €201.33 Total amount repayable: €12079.87

Western Pomise

Spocker wrote: »

AIB have an online calculator: http://personal.aib.ie/our-products/loans/car-finance#comploancalculator

10k over 5 years = Monthly Repayments: €210.30 Total amount repayable: €12,618.00

In my local Credit Union, when you apply for a loan for a car, you're charged the standard rate on the loan (10%) until you call in and produce the VLC with your name on it for the new vehicle, and then they will adjust the rate.

Using my local CU's loan calculator for the same amounts: Monthly Repayments: €201.33 Total amount repayable: €12079.87

Thanks, what's the 'VLC'?....car I am buying may not be as much as 10k exactly....is an overall 'car loan' the cheapest way to get the extra money?....IYKWIM.

Or should I get the car Loan for say 8k and the other 2k through a separate Loan.....

Again thanks for any replies.

newacc2015

Western Pomise wrote: »

Thanks, what's the 'VLC'?....car I am buying may not be as much as 10k exactly....is an overall 'car loan' the cheapest way to get the extra money?....IYKWIM.

Or should I get the car Loan for say 8k and the other 2k through a separate Loan.....

Again thanks for any replies.

I imagine a VLC is a vehicle license cert. I imagine this posters CU gave him a discount on their interest rate, as the risk of default is lower as there is collateral if he defaults on the loan

A car loan is cheaper than a vanilla loan, as there is something to possess at the end of the day if you dont pay your loan

I would get a loan from whoever is cheapest. Are you buying from a dealer if the car is around 10k? Some dealer have decent finance on second cars eg VW and other VW brands eg Seat, Skoda

Spocker

newacc2015 wrote: »

I imagine a VLC is a vehicle license cert. I imagine this posters CU gave him a discount on their interest rate, as the risk of default is lower as there is collateral if he defaults on the loan

A car loan is cheaper than a vanilla loan, as there is something to possess at the end of the day if you dont pay your loan

This is correct, although it's not a 'reduction' in the rate as such. Once you bring in proof that you've actually bought a car (with the loan that you said was for a car) then they will switch you to the 'car loan' rate, which is cheaper than an ordinary loan.

One of the several advantages of a a CU loan, is that you'll own the car from the start, and you can overpay or fully pay off the loan at any time, with no penalty. Remember, finance from a dealer usually has some kind of up-front payment, and a balloon payment at the end too.

Western Pomise

I checked more carefully and rate on 'car loans ' is actually 6.75%...with C Union,seemingly that Woukd still beat most banks.....and you can repay balance of loan early without penalty.Is that the case?

Thanks for comments on people's experiences with bank car loans of say 10k and the conditions that were attached.

Western Pomise

Just bumping this one slightly ....





Thanks for any replies.

BuffyBot

Western Pomise wrote: »

Just bumping this one slightly ....





Thanks for any replies.

Don't bump threads, especially 2 hours after the last post.

goldenhoarde

I'd go with the CU as they would most likely be the best rate and are IMO more flexible than a bank

Borrow the 10k but if you need to but if you don't need the full amount then just overpay the loan

if its from a dealer it may be worth seeing what finance if any they offer - be sure to ask for all charges as some used to charge money at the start and end for admin/documents. This route as mentions means you won't own the car till final payment and be aware of deposit amounts and balloon payments at the end

Western Pomise

goldenhoarde wrote: »

I'd go with the CU as they would most likely be the best rate and are IMO more flexible than a bank

Borrow the 10k but if you need to but if you don't need the full amount then just overpay the loan

if its from a dealer it may be worth seeing what finance if any they offer - be sure to ask for all charges as some used to charge money at the start and end for admin/documents. This route as mentions means you won't own the car till final payment and be aware of deposit amounts and balloon payments at the end

Thanks,not buying from a Main dealer so will go with the Credit Union I think.

gizmo73

Western Pomise wrote: »

Thanks,not buying from a Main dealer so will go with the Credit Union I think.

Hi, I was in contact with my credit union yesterday about car loan for similar amount and was told it's a set fixed rate of 12.68% interest. Also that's the rate for all credit unions??

Spocker

gizmo73 wrote: »

Hi, I was in contact with my credit union yesterday about car loan for similar amount and was told it's a set fixed rate of 12.68% interest. Also that's the rate for all credit unions??

Thats not correct. all credit union set their own rates. For example, St Dominics in Waterford have a car loan rate of 8.25%, whereas Castlebar Credit Union have a rate of 8.5%

The rate of 12.86% seems quite high for a car loan rate, are you sure it's not the standard loan rate? Which CU are you with?

You may have been told that the maximum rate of interest is 1%/month (which equates to a maximum APR of 12.68%); see here: http://www.creditunion.ie/whatweoffer/loans/

Most CU's charge a lot less

gizmo73

I was thinking that alright after doing bit of research. It was Ansac CU. Saying that I didn't get too much help on the phone line and when I said it was a very high rate compared to banks he told me to go onto website all the info was there.
Might ring back and see if talk to someone else

Spocker

ANSAC don't seem to have a dedicated car loan rate unfortunately; it's either secured/express at 7.9% or Standard at the full rate of 12.68%

http://www.ansaccu.ie/content.asp?section=18
http://www.ansaccu.ie/calculator.asp?bgc=&sbgc=