Make your savings work for you
A share secured loan is when the amount of money borrowed is less than the amount of savings held. Donegal Town Credit Union members can borrow against their current savings with a share secured loan. The more you have in savings, the more you can borrow against them.
Why a share secured loan is better?
- We offer a very competitive loan rate of 6% (6.19% APR).
- Most people find it easier to repay a loan than replace savings.
- Fast approval for share secured loans.
- Enjoy even lower rates than our product-specific loan offers.
- Continue to earn any future dividends on your savings account.
- Can be used for just about any purpose.
- It guarantees you won’t spend your savings, as you may not spend shares equivalent to the loan balance.
- Convenient payment options on your loan.
- Both Savings & Loans of eligible members are covered by Free Life Insurance. (terms and conditions apply)
Other things to consider
- As you are receiving a reduced interest rate, your loan is not eligible for an interest rebate
- You will not have access to the shares that you have frozen against your loan until your loan is paid off.
- If you go into arrears we will use the secured shares to clear those arrears.
Why take a secure loan, rather than withdraw shares?
We now offer Secure loans at the rate of 6% (6.19APR%). With a secure loan you get a reduced rate of 6% (6.19%APR) and we freeze yours share as security against the loan. Although shares are frozen against the loan, there are certain advantages in taking a loan rather than withdrawing your shares when money is required.
Consider the following example –
Sam and Jim are both married men with young families, they are both regular savers with the Credit Union and each has €1,000.00 in shares. They need to get some furniture for the family home.
Sam withdraws €1000.00 from his shares to buy furniture.
Sam saves €61.64 in interest over a period of two years.
Sam loses €2 dividend over the two years on his €1,000.00
By taking out all his savings he becomes discouraged and does not try to save again as he feels he would never reach €1,000.00 again.
After two years he has no savings and has lost the good habit of saving.
SAM DIES SUDDENLY
Sam withdrew €1,000.00 from the Credit Union to buy the furniture and then he died suddenly.
His family have the furniture paid for but there are no savings and no insurance cover for his family.
Jim decided to take a loan of €1,000.00 from the Credit Union.
Jim agrees to pay the loan back over 2 years so the interest charges amount to €61.64.
Jim still has €1,000.00 in shares which will pay him €2 dividend over the 2 years of his loan.
By taking on the responsibility of paying back a loan he keeps coming back each week to the Credit Union.
After 2 years Jim has paid back the loan and still has €1,000.00 in shares and has the wonderful habit of making payments to the Credit Union to meet his loan repayments. This will help his Credit Rating and get him into the habit of putting money aside each week that he may continue to save once the loan has closed.
JIM DIES SUDDENLY
Jim took the loan of €1,000.00 and bought the furniture and then died suddenly.
The insurance in the Credit Union covers the loan so it is paid off and the debt is cancelled. The family have nothing to pay.
The family also receives – His savings of €1,000.00 and his insurance on these savings – as he is aged under 55 years the insurance cover is 100% so the family get €2,000.00.
This example demonstrates not only good economics but a proper sense of responsibility to one’s family to take out a loan which is insured and thereby relieve them of a burden in the event of an unexpected death.
Our rate for secured loans is 6.19%.(APR). “For a €1,000, 1 year variable loan with weekly repayments of €19.83 and an interest rate of 6.19%APR, the total repayments will be €1030.85″
Lending criteria and terms and conditions apply. Warning: If you do not meet the repayments on your Loan your account will go into arrears. This may affect your credit rating, which may limit your ability to access credit in the future.