Is the dividend paid to a percentage of your savings or loan amount?

Discussion in 'Credit Union issues' started by Shawady, Jan 25, 2012.

  1. Shawady

    Shawady Frequent Poster

    Posts:
    944
    Is the dividend paid to a percentage of your savings or loan amount?
    For example if you have 5K in savings and a loan of 15K, which amount is used to calculate your dividend?
     
  2. MANTO

    MANTO Frequent Poster

    Posts:
    424
    Calculated on Shares (Savings)
     
  3. Shawady

    Shawady Frequent Poster

    Posts:
    944
    Thats what I would have presumed also, but I seem to remember a friend of mine telling me that he got a decent sum of money of the CU at the end of the year because he had a huge loan with them. I got the impression he did not have much savings.
     
  4. ClubMan

    ClubMan Frequent Poster

    Posts:
    43,754
    Maybe he meant a refund of some of the interest paid which was then used to reduce his outstanding loan balance? I can't see how any financial institution would PAY interest to a borrower on a loan that they have!
     
  5. MANTO

    MANTO Frequent Poster

    Posts:
    424
    I reckon the didend was paid into his shares and was then allowed to offset them against his loan.
     
  6. ontour

    ontour Frequent Poster

    Posts:
    1,039
    Some credit unions have a dividend on shares and a rebate on interest paid. The logic would be that at the start of the year they charge 10% interest on aloan. At the end of the year, they look at the available surplus and decide to give part to savers and part to borrowers. In retrospect you may have got the loan for 8% but there is no guarantee that they will give any rebate the next year.