Secured rate refers to any secured loan, it can be secured against several things, not necessarily your savings.
Can anyone explain why anyone would borrow from the credit union using their secured rate. As far as i can see it only applies where you borrow less than your savings. Why would you bother to do that. You give them 10,000 to look after for you and you then borrow 5,000 of your own money and pay them 5.5% for the privilage. Why not just spend your own 5000 and save paying the 5.5% interest
Thats a ridiculous statement to make. Nobody is forcing a member to take a secured loan - would you prefer a member to have to pay the full rate if they prefer to keep their savings intact as many of our members choose to do? Emotive descriptions like "absolute madness" should have no place in commentary on a serious financial website.It's absolute madness and the life insurance issue doesn't justify it.
Imagine the war that would break out if AIB or Bank of Ireland offered such "deposit backed loans". The Central Bank would reprimand them for not acting in the best interests of the cusomer.
if they prefer to keep their savings intact as many of our members choose to do?
...It makes no financial sense to borrow at 5.5% while getting 1% on their savings...
I know of an individual who immediately before going for major surgery took out a substantial loan and lodged it into their shares....It's absolute madness and the life insurance issue doesn't justify it....
We do not have a legal duty as we are not subject to the Consumer Protection Code (I have no problem with pointing out to a member that it would cost them less to use their own money). We are legally obliged to highlight the cost of the contract prior to the member entering it so we are fully transparent.And would the life insurance have covered it? Certainly a normal life policy would be expensive or void.
Fine, if playing the system like this works, maybe do it. But is that not playing the system against other credit union members?
Brendan
Well one minute you're lambasting credit unions for being anti member, now you're suggesting the member would be acting anti credit union. Go figure!And would the life insurance have covered it? Certainly a normal life policy would be expensive or void.
Fine, if playing the system like this works, maybe do it. But is that not playing the system against other credit union members?
Brendan
We do not have a legal duty as we are not subject to the Consumer Protection Code (I have no problem with pointing out to a member that it would cost them less to use their own money). We are legally obliged to highlight the cost of the contract prior to the member entering it so we are fully transparent.
Your comparison with a mortgage holder who has savings in a different post on this thread again ignores real life issues in todays economy. I have substantial savings and I have a mortgage (taken out recently so not a tracker). My net indebtedness is zero but I choose to hold onto my cash so as to enable me to purchase other property if the right opportunity presents itself
Well one minute you're lambasting credit unions for being anti member, now you're suggesting the member would be acting anti credit union. Go figure!
Just did a quick trawl of our within shares loans issued over the last 6 months.
This is much worse than I thought.borrowers on the standard rate loan can refinance their loan to the within shares rate once the loan is paid down to the savings amount.
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