Credit union shares

Dave087

Hi all,
Quick question. I have a loan with the credit union of €15,500 and shares of €11,500. I understand that shares are locked away when you have an outstanding loan but I have heard that shares can sometimes be accessed in some circumstances once your shares don’t drop below 25% of the outstanding loan. Does anybody know if this is possible or have any of you done this in the past? I’m looking to withdraw some of my shares to help use towards a deposit for a house. Just looking for a little bit of advice thanks

blindside88

You would need to speak to your credit union about this however I may have another suggestion for you.It’s worthwhile looking at taking a bank loan to clear the credit union, keeping some of the now accessible shares for your deposit and clearing the remainder off the loan to reduce interest paid (Speak to your mortgage advisor before doing this to make sure it doesn’t negatively impact on your mortgage.

Just as an example, if you are paying 8% interest on your €15500 loan over a 5 year term your current monthly payment is approx €314 per month.

If you take a bank loan of €15500, clear the credit union loan to access your shares. Say for example you want to access €5000 of your funds to use towards a deposit, clear the remaining €6500 off your new loan (leaving you with a loan of €9000). Assuming the same interest rate and term your monthly payment would be approx €182 per month, meaning it costs you less long term and gives you more repayment capacity for your new mortgage.

As I said double check with your mortgage advisor first. Best of luck with the property hunt and with what ever you decide