Clearing A Loan Balance From Shares

E

eirman

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Suppose .....
I have €4,000 in shares
I have a balance of €3,900 to be paid off a loan.

Can I clear the loan with my shares
rather than wasting money on unnecessary interest payments?
It seems logical that I should be allowed to do so.

Also, would this practice be frowned upon and go against me in the future?
 
Some things to consider
1) What was the investment to generate the 4k in shares? How is it performing? Is there any capital gains or taxes owed?
2) What is the interest rate and term of the loan?

I'm in similar position, have shares which are performing very well, I have outstanding mortgage at competitive market rate and good cashflow to cover the repayments, so for the moment I am happy to let shares continue to grow and continue to repay mortgage at usual rate.

If shares were static or not performing, and you wanted to either cut losses and get out, or just shift things around, and loan was at unattractive rate, then it would seem to make more sense to cancel these out.
 
thos said:
Some things to consider
1) What was the investment to generate the 4k in shares? How is it performing? Is there any capital gains or taxes owed?
2) What is the interest rate and term of the loan?

I'm in similar position, have shares which are performing very well, I have outstanding mortgage at competitive market rate and good cashflow to cover the repayments, so for the moment I am happy to let shares continue to grow and continue to repay mortgage at usual rate.

If shares were static or not performing, and you wanted to either cut losses and get out, or just shift things around, and loan was at unattractive rate, then it would seem to make more sense to cancel these out.
Click to expand...

I think you misunderstood the question, the OP is talking about CU shares (i.e. deposit) and a CU loan...
 
@eirman makes perfect sense for you to repay it. CU's depend on people not doing so. A lot of people create a mental image of their shares being their money and don't like touching it, rather than looking at their net position.
The only way it'd count against you is if you needed another loan before you've built up a share balance again.
 
Thanks RedOnion - (I haven't applied for the loan yet).

Better than clearing the loan with one injection from my shares,
I'll probably make smaller injections every six months or so, based on information within this thread.

This should reduce the APR % to a more reasonable rate.
I'll prepare an Excel calculator and post it here at some point.
 
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