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  #1  
Old 12-10-2005, 02:22 PM
johnnybegood johnnybegood is offline
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Default Credit Union --- best for loans --- what a joke!

Hi just enquire about a credit union loan for 2k and this is what they qouted:

12 mths (52 weekly payments)

total payment 45 (split capital 38.46 and balance 6 odd interest)

I have prepared this. On that basis the interest is 30%

TERMLOAN 30% PAID BALANCE 1 2,000 50.00 195.00 1,855.00 2 1,855 46.38 195.00 1,706.38 3 1,706 42.66 195.00 1,554.03 4 1,554 38.85 195.00 1,397.89 5 1,398 34.95 195.00 1,237.83 6 1,238 30.95 195.00 1,073.78 7 1,074 26.84 195.00 905.62 8 906 22.64 195.00 733.26 9 733 18.33 195.00 556.59 10 557 13.91 195.00 375.51 11 376 9.39 195.00 189.90 12 190 4.75 195.00 - 0.36

Am i missing something here how ridiculous is that!!!!

Same info based on 18 mths works out at 20.5% !!!! RIP OFF

TERMLOAN20.50%PAID BALANCE1 2,000 34.17 130.00 1,904.17 2 1,904 32.53 130.00 1,806.70 3 1,807 30.86 130.00 1,707.56 4 1,708 29.17 130.00 1,606.73 5 1,607 27.45 130.00 1,504.18 6 1,504 25.70 130.00 1,399.88 7 1,400 23.91 130.00 1,293.79 8 1,294 22.10 130.00 1,185.89 9 1,186 20.26 130.00 1,076.15 10 1,076 18.38 130.00 964.54 11 965 16.48 130.00 851.01 12 851 14.54 130.00 735.55 13 736 12.57 130.00 618.12 14 618 10.56 130.00 498.68 15 499 8.52 130.00 377.20 16 377 6.44 130.00 253.64 17 254 4.33 130.00 127.97 18 128 2.19 130.00 0.16 340.16

PLEASE SOMEBODY CORRECT ME IF I AM WRONG WITH MY CALCUALTIONS CAUSE THIS JUST SHOCKS ME. the most vunerable of people borrow from the credit union and this is the rates they charge. Then i read in the paper that ifsra have said they are better value for loans then anybody else!!! What a load of BS!!!

By the way the qoute was provided by west cabra credit union SHAME ON YOU!!!!
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  #2  
Old 12-10-2005, 02:28 PM
CCOVICH CCOVICH is offline
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Default Re: Credit Union --- best for loans --- WHAT A JOKE!!

I presume that it's €45 per week?
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  #3  
Old 12-10-2005, 02:31 PM
johnnybegood johnnybegood is offline
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Default Re: Credit Union --- best for loans --- WHAT A JOKE!!

correct 45 per week split 39 euro capital and 6 interest. seems crazy % of interest
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  #4  
Old 12-10-2005, 02:32 PM
ClubMan ClubMan is offline
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Default Re: Credit Union --- best for loans --- WHAT A JOKE!!

Who says that they're best for loans? Certainly not many AAM contributors if you check out previous discussions about the lending policies and rates of the CU. By the way, the effective cost of the loan will also be inflated by the general need to keep money on deposit or in shares while borrowing. Ask them to quote an APR for the loan (including the cost of keeping money in deposits/shares) and see what they say.
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  #5  
Old 12-10-2005, 02:42 PM
johnnybegood johnnybegood is offline
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Default Re: Credit Union --- best for loans --- WHAT A JOKE!!

Hi Clubman,

It was in the irish independent about a week or so ago. the article qouted Ifsra information and it stated the credit union was best value.

I remember it because i was telling my father in law how bad of a deal the credit union give in comparsion to Tesco, Nib etc. He then brought home a photocopy of this artice and said why does it say here its the best rate.

It really got on my nerves cause not once int he article does it mention any individual credit union or any specific rates and this is from ifsra !!!! Bad information !!
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  #6  
Old 12-10-2005, 02:49 PM
johnnybegood johnnybegood is offline
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Default Re: Credit Union --- best for loans --- WHAT A JOKE!!

Apr for the 12 month repayment term is 17% (ignoring interest earned on maintaining savings) and for the 18 month term its also 17% (again ignoring interest on savings)

seems to me that a credit card would offer better value!!!
I understand that this was discussed in detail before and i have seen the previous discussions but i just wanted to remind people of the rip off that is taking place and especially in disadvantaged areas such as cabra.

before anybody tears me apart for calling cabra disadvantage wake up to the truth it is .... i should know i was born and bred there and only moved away form the area six months ago so thats 25 years of experience i love the place but the facts speak for themselves.

john
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  #7  
Old 12-10-2005, 02:58 PM
ClubMan ClubMan is offline
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Default Re: Credit Union --- best for loans --- WHAT A JOKE!!

Quote:
Originally Posted by johnnybegood
It was in the irish independent about a week or so ago. the article qouted Ifsra information and it stated the credit union was best value.
Well, if they said that then they are obviously very wrong.
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  #8  
Old 12-10-2005, 03:22 PM
ajapale ajapale is offline
 
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Default Re: Credit Union --- best for loans --- WHAT A JOKE!!

From memory I think that the Irish Independent stated that some Credit Unions offered fairly good rates (and even these were not as good as some of the financial institutions).

The IFSRA report may be availiable on line, if I find the link Ill post it here. (Its the 5th pdf document in the list.)


The issue of credit unions and personal loans was discussed here last year.

aj
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  #9  
Old 12-10-2005, 10:07 PM
WizardDr WizardDr is offline
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Default Re: Credit Union --- best for loans --- WHAT A JOKE!!

As far as I know most credit unions charge interest bewteen 6-12% with the upper APR being abiut 12.7%. Paying a weekly amount is what credit unions do to facilitate payments. If they said 45 per week, all that happens is that the capital goes down faster. You have assumed that it was 45 each week to clear the loan. Ask them the 'rate' first. When you examine your statement you should be able to see the breakdown. As an example, once you pay the first amount, the interest would reduce and so on. So multiplying your 6 by 52 by 2 would be wrong to start with.

Also, even though IFSRA is a bureaucracy, when they release facts, particularly when they dont correspond with your own, would lead me (if I were you) to recheck your assumptions.

Ranting like you did, and dismissing the whole lot as a form of exrement, is in my view, shooting from the hip. Put the gun away. Sit down and recheck your calculations.
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  #10  
Old 13-10-2005, 12:08 PM
angie angie is offline
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Default Re: Credit Union --- best for loans --- WHAT A JOKE!!

as far as i know that 6 would be split between interest and savings. As the balance goes down more goes to savings and less to the interest.
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  #11  
Old 13-10-2005, 01:24 PM
lemeister lemeister is offline
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Default Re: Credit Union --- best for loans --- WHAT A JOKE!!

I also believed that credit unions were only allowed charge 1% interest per month max and so 17% seems incorrect
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  #12  
Old 13-10-2005, 04:11 PM
Slim Slim is offline
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Default Re: Credit Union --- best for loans --- WHAT A JOKE!!

Jo(h)nnybegood

The maximum rate of interest a CU can charge is 1% per month, or 12.68% p.a. The new credit agreement must have the APR stated on it but you probably did not get that far. Is it possible that you were also quoted for Repayment Protection Insurance? Since you were wrong in your original figures, I would have to say the rest of your post, or should I say rant, must also be under scrutiny.

Slim
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  #13  
Old 01-02-2006, 09:34 AM
Bruze
 
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Default Re: Credit Union --- best for loans --- WHAT A JOKE!!

i realise that this tread is a little old but i had an issue with a credit union loan recently that i am still trying to sort out.

got quoted for 24k over 9 years

There interest rate quoted was 9.8%


They quoted me 400 as the monthly repayments on this?
And that doesnt include shares.

i have worked it out to be 335/month

Their interest amount seems correct but they have me paying back a larger capital amount.

Has any1 else had any experience with this?

Would CU's not usually have to abide by normal APR repayments?
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  #14  
Old 01-02-2006, 11:07 AM
ritab
 
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Default Re: Credit Union --- best for loans --- WHAT A JOKE!!

I was looking for a loan recently. My bank will give it to me at 5.7% but the Credit Uinion are charging 9.6% and that also means your savings are tied up.
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  #15  
Old 01-02-2006, 12:33 PM
darag darag is offline
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Default Re: Credit Union --- best for loans --- WHAT A JOKE!!

Something very very wrong there, Bruze. 9.8% (anualized) should mean repayments of just under 330 a month. Or as you have calculated, 335 a month if the 9.8% is 12 times the monthly rate. 400 a month corresponds to 15.6% APR. If there is a mandatory savings requirement on top of this then the rate could easily be mid 20s. That's usury. Ask them how they calculated the interest rate or repayment amount.

Quote:
Also, even though IFSRA is a bureaucracy, when they release facts, particularly when they dont correspond with your own, would lead me (if I were you) to recheck your assumptions.
You are being too trusting, Wiz. If you followed one of the previous discussions on this issue, you would have seen it demonstrated that the IFSRA don't seem to know their arses from their elbows when it comes to basic interest rate calculations. There were numerous mistakes in their last published value-for-money "comparison".
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  #16  
Old 01-02-2006, 12:42 PM
darag darag is offline
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Default Re: Credit Union --- best for loans --- WHAT A JOKE!!

Forgot to mention, while johnnybegood's tone might be a bit shrill, he's right to be outraged. 45 euro a week for 2K is about 37% APR which is outragous.
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  #17  
Old 02-02-2006, 02:14 AM
JoeB JoeB is offline
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Default Re: Credit Union --- best for loans --- WHAT A JOKE!!

I reckon the first guy is paying interest at 17% APR...

He's paying 45 per week for 52 weeks = 2,340..

Interest = 340.

Interest as percentage = (340/2000)*100 = 17%

Since the interest is paid over one year and there are no additional charges then the APR = max 17%.

is this right?
Joe
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  #18  
Old 02-02-2006, 05:48 AM
dam099 dam099 is offline
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Default Re: Credit Union --- best for loans --- WHAT A JOKE!!

Quote:
Originally Posted by JoeBallantin
I reckon the first guy is paying interest at 17% APR...

He's paying 45 per week for 52 weeks = 2,340..

Interest = 340.

Interest as percentage = (340/2000)*100 = 17%

Since the interest is paid over one year and there are no additional charges then the APR = max 17%.

is this right?
Joe
You have made no adjustment for the fact that the balance is reducing over time. AFAIK the APR will take account of the balance outstanding after each instalment.
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  #19  
Old 02-02-2006, 08:15 AM
Berni Berni is offline
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Default Re: Credit Union --- best for loans --- WHAT A JOKE!!

Quote:
Originally Posted by JoeBallantin
He's paying 45 per week for 52 weeks = 2,340..

Interest = 340.
However, if you factor in the fact that most credit unions require savings of 2 per week, its 43 x 52 = 2236
2236/2000 = 1.118 or a rate of 11.8%
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  #20  
Old 02-02-2006, 11:04 AM
darag darag is offline
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Default Re: Credit Union --- best for loans --- WHAT A JOKE!!

Quote:
I reckon the first guy is paying interest at 17% APR...

He's paying 45 per week for 52 weeks = 2,340..

Interest = 340.

Interest as percentage = (340/2000)*100 = 17%
No, the APR is roughly twice 17% (a little bit more actually). As dam009 says, you've paid 340 on a reducing balance. To do a "rule of thumb" calculation for something like this, you can half the loan amount (because, roughly speaking, on average over the year he only owes 1000 - at the start obviously he owes much more but towards the end he owes much less), so he is paying 340 interest for the pleasure of having 1000 for the year which is 34%. The reality is actually more complicated because, the portion of the 45going on interest and against the capital is changing thoughout the term of the loan but the "half the total" rule of thumb gives a reasonable estimate if the number of repayments lie within a certain range. The only way to get a true figure is to use Excel or a real financial calculator.
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