Except that you could just do option 1 with the credit union too so your post makes no sense.
Unlikely. Most Credit Unions require people to keep 25% of their borrowings in shares.
Well by helping themselves they are helping their customers, what with them being member-owned co-operatives.Paying interest on your own money is madness.it happens a lot that people think the credit unions are helping the customer.they are only helping themselves
This is a myth, the vast majority of credit unions have moved away from this practice.
Get one thing straight:- Nobody in Credit Unions is borrowing his/her own money.
Brendan, Here we go again. Semantics are just that - Semantics. Nobody is borrowing their own money in Credit Unions. The amount on deposit acts against defaulting and Credit Unions were founded not to give out loans that would not be repaid. Whatever Credit Unions are, they are not charities. They are "small businesses" that must put back any profit into the "business." Many people work on a voluntary basis for Credit Unions; even I used to.Leper
While I am sure that the two credit unions you founded were customer friendly, the vast majority are not or were not.
They give what they call "secured loans".
People have €20k in shares and they need €15k, and they go off and take out a loan for €15k instead of withdrawing €15k.
Up until very recently, most credit unions required someone with say €5k who wanted to buy something for €20k to borrow the €20k.
So these people are borrowing their own money.
Brendan
OK Leper
Park the Credit Union propaganda for the moment to focus on the question asked by the OP.
I have €10,000 in cash sitting on the kitchen table.
I want to buy a car for €10,000.
I go out and give the seller €10,000 and drive away in my new car.
You have €10,000 cash.
You go into ptsb and put it into an account which pays you no interest and which you cannot withdraw it from.
They lend you the €10,000 to buy the car and charge you €700 a year interest.
Are you borrowing your own money or is that just "semantics"?
"Semantics" will make you a very poor person.
Brendan
Nice post LS400 and I can see what you are saying. Yes, I'm a good talker and the Burgessmeister is the kind of guy I'd enjoy entertaining on our terrace in Spain while looking at the Mediterranean waves lapping against the beach. You're borrowing €15K and have €8K in CU Shares. Great! A good place to be. If you never need another loan you'd be stupid not to use your CU Shares.I had one of my brain waves a few weeks ago, I thought I would spend some money on the house and garden, I joined the CU a couple of years ago and have about 8k with them, I called them up, never having borrowed from them before to ask what’s the procedure in taking out a small loan, about €15k would do, so I really only needed 7k.
Told them what it was for.
Not a problem, but I need to borrow the €15k and leave the 8k in the account, crazy, why would I do that when I only need 7k
The Op has a valid question.
Leper, your a great talker alright, and I like you posts, but your a bit like a politician on this, answering a completely different question.
Your answer is in reply to “is there a need for credit unions” But no one has asked that.
Got it in one!Leper, your a great talker alright, and I like you posts, but your a bit like a politician on this, answering a completely different question.
Hold on, auto loan notes are carrying 6-7% interest rates in Ireland? Is this for the subprime market or a prime borrower? What rates are banks and credit unions paying to depositors? I ask because rates are historically low virtually everywhere and 6-7% is absurd in a world where one can borrow a million at 2-3%. I would expect depositors to get 2-3% on their bank deposits if 6-7% is what is charged on a small value loan.OK Leper
Park the Credit Union propaganda for the moment to focus on the question asked by the OP.
I have €10,000 in cash sitting on the kitchen table.
I want to buy a car for €10,000.
I go out and give the seller €10,000 and drive away in my new car.
You have €10,000 cash.
You go into ptsb and put it into an account which pays you no interest and which you cannot withdraw it from.
They lend you the €10,000 to buy the car and charge you €700 a year interest.
Are you borrowing your own money or is that just "semantics"?
"Semantics" will make you a very poor person.
Brendan
Thanks Brendan for suggesting what I should do and again I see your semantics still obtain ("propaganda" etc) and that's OK, you own the forum and can take your ball home at any time.
Yes, what you say makes some sense and is relative to people who have access to earning good money. If you have easy access why borrow? It makes good business sense not to borrow. (You see, we agree on some points).
You're a low earner and life suggests you will need more loans in the future. You don't have the "reddies" in the biscuit tin under your bed. You need to foster good business sense with people who will give you those loans. Credit Unions can fill that need. Whatever way you look at it, you need to keep some money with them. Like I said in a previous post there is a need to show you can save something as Credit Unions are not charities.
Once again I respectfully say you are not borrowing your own money; that's there for your future use.
"Semantics" - Yes, I'm not rich, but I plough on and hope when the Judgement Day comes my performance will receive a favourable outcome. I hope I'm seen as the Leper who gave thanks.
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