Credit Union

[jennyjoan]

our Credit Union and many of them here in NI only got 1% interest there in November 2015 deffo not a great interest.

Yet, they charge 12 and half percent interest on their loans and only 4 and half percent is charged on a loan in the banks (roughly) - I have been working there for yonks and I can't work it out.

Why is the interest so high in borrowing - I have been told various reasons so that you know

1. If you lose your job - CU can reduce the payments

2. Well can't think of the second reason

Was told once upon a time that the 12 etc interest - you more or less got it in the dividend/interest at November time.

Anybody know the real reason. Our Manager is a Nightmare - many friends have approached her - she is riddle me riddle me row conversation

[-Talbot-]

Why does the % fluctuate so much?

[jennyjoan]

you tell me

[-Talbot-]

ok I will ask your gaffer!

[rockyracoon]

I thought credit unions were cheap to borrow from, that's what made them more attractive than banks. 12.5% is expensive.

[Canary42]

The difference is to cover the cost of bad loans.

Remember the 2008 crisis was caused by banks making too many bad loans.

Incidentally I'm surprised you can get an unsecured loan at 4½ percent from a bank.

[hc4361]

Not a hope of getting a short term bank loan for 4.5%.

Wasn't you getting 4% interest a couple of months back, jenny?

[hc4361]

My local credit union charges up to 38.5%

http://www.castleandcrystal.co.uk/loans_our_loan_products.php

[Peter Pedant]

few points.

good ones from canary - yes you have to factor in the cost of bad loans

also the reputation of a bank branch depends heavily on who the manager is and what he does and this seems to be the case for credit unions whose structure is " mutuals " isnt it ? [ completely different to banks ]

and yeah I agree if you can get an unsecured loan from a bank at 4 1/2 % then go baby go ....

[Peter Pedant]

Hey I remember being forced to sell land in 2000
because other members of the family stated the stock market gave a return of 11% year on year....
yup in 2000 the stock market was at 9000 and fifteen years later it is 6000. The problem for me was that I knew the argument was a dog as soom as I heard it ....

and yes I do remember this and point it out to the ones who forced the sale who just say - everyone now and then you make a bad decision in the best possible faith .....

[' and the price of the land we sold is thro the roof
whenever we pass it I turn to my brother and say - do you say to yourself I used to own that once ? ]

1% interest is a market return on a deposit innit ?

Getting a decent return on your money can be an issue ....

[ubasses]

Lending money is known as Credit and Risk. Customer gets the Credit(loan) Bank takes the Risk. Since the recession the Banks are taking less risk, so people are having to go elsewhere and pay high interest rates for the privilege as they are considered high risk.
That leaves the low risk customers getting low rates at the Banks, as they know they will get their money Bank. Others know they get the high risk customers therefore high interest rates, as they may see less of their money back.

Unfortunately Banks Branches do not rely heavily on who the Manager is, by the time I retired there was really no discretion at all, everything dictated from above and carried our in a proscribed manner. Only ones left in that position were senior corporate account managers.