Help with credit union debt...

S

scruff

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Hey so im in hoping someone has a bit of advice for me.

I've got a credit union loan of about €6,000 and ive also got shares around that same figure. Ive also got a credit card bill of around €1,000. The guy in the union said it would be better for me to keep my shares and just tap away at the loan as opposed to using my shares to wipe it clean as that would make it easier for me to get another loan from them in future.
However, i think im paying high interest on that €6,000 and im thinking of course the union are going to say that.

I was thinking i could use my shares to wipe the loan clean, then use some of the cash i was pumping into the union to get the loan down to help pay off my credit card bill. Does that sound wise? I just dont like paying interest on all these loans. And im thinking i could put the extra cash im using at present to pay the loans into a high interest saving account, making money for me.
 
I would agree with your strategy, there is little point spending several years paying down a loan when you have the money there to do it now.
 
Borrow another 1,000 off the credit union and pay off the cc debt.
Then cut up the cc.
 
Sounds to me like there is still a difference between what you have in shares and what you owe? What difference is this exactly? 100, 200, 300 or more?

I would see if the credit union will allow you to withdraw the amount you owe on your credit card from your shares and then pay the credit card off. This will be at a higher interest rate than the CU.

It would also help to know what you are paying off your CU and whether its weekly monthly etc and what goes into shares. then people can advice better as to when you should clear loan with shares.
 
niceoneted said:
Sounds to me like there is still a difference between what you have in shares and what you owe? What difference is this exactly? 100, 200, 300 or more?

So as it stands I currently have a
Credit union loan: €6338.22
Credit union shares: €6341.63


It would also help to know what you are paying off your CU and whether its weekly monthly etc and what goes into shares. then people can advice better as to when you should clear loan with shares
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I did have a second loan with the union but it has been paid off which was repayments of €220.

Which I think means I am paying in total €572 to my credit union per month which is then split between loans and shares.

I think the CU have some policy that if you are paying off you loan with the shares, you must keep a certain percentage of the shares. So I may not be allowed use it all.
Click to expand...
 
Take 1K out of shares and pay off credit card. Then take as much of the shares remaining as the CU will allow to repay the CU loan.
 
I'd go with the CU advice. As long as you have collateral in the CU it's very easy to get a loan if you need one. Very handy in emergencies. Indeed our local CU currently offers favourable rates for secured loans, i.e. if you have the collateral you pay 6.5% and get approved instantly, if you don't, you may or may not get a loan (depending on your circumstances and standing with the CU), it could take a while to be approved, and interest rate is, I think, 10.4%.
I would hang on to the shares if at all possible. Perhaps chip away at the CU loan for another few months and once you have the equivalent of the then outstanding CC debt freed up in the CU, take a second (secured) loan out to pay off the CC and cut it up. Then work away on the big CU loan and pay any little bit extra you have to spare against the loan to pay it off early (no penalties in the CU for doing that, only praise and savings in interest!)

HTH
 
Firstly thank you for clarifying the questions I asked.

I don't agree with chook. I believe you must pay off your cc as soon as possible and thus you need to approach you CU to try and release the 1k you need to clear it asap.

Then I would suggest you continue to pay your current amount into the CU. Then in say June/July Get them to know shares off Loan. Continue to pay in the amount you are paying in for as long as you can.

What is the rest of your cash flow like? Are you managing to pay the CU amt easily? You haven't filed in the traditional template for this section so it's hard to advice further.
Best of luck with it.
 
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