Unlike business borrowing, type of borrowing products you need depends on your requesting amount, rate of interest and terms of the loan. Personal Credit Rating also known as Beacon Score (FICO Score) and your relationship banking with Sharons Credit Union play vital part in determining factors for loan approval.

Here are some important factors to consider :

• Credit - This is your personal credit history information, such as previous loans payment history, beacon score, employments and overall credit worth.
• Capacity - This is your earning power, current income and credit commitments. Can you really afford another loan now?
• Collateral - This is an item of value you own that can be promised to the lender. If you don't repay your loan, the lender has the right to take your collateral. By pledging collateral, you can sometimes get a larger loan or lower interest rate. That's because you are more likely to pay back the loan with something you value at stake, so the lender is taking a smaller risk.

You can borrow up to $25,000 without any security based on your net worth, credit score and credit history with credit union. Here are some of the loan requests:

          ♦ Purchase new furniture                 ♦ Holiday & Travel Expense                                     
          ♦ Home renovation                           ♦ Consolidating high credit card balance
          ♦ Car, home, business insurance      ♦ Car repair expense
          ♦ Education & tuition fee expense    ♦ Children wedding expense

We are committed to provide turn around time for loan approval within 48 hours and those individual with good relationships, we could provide an answer within an hour. We could also provide phone loan requests and once approved, the funds can be deposited directly into member’s account as soon as you come into any of our branch to sign the loan document.

RRSP (Registered Retirement Savings Account) loan can be approved up to $50,000 for those who invest the funds with Sharons Credit Union. Normally, the interest rate charged will be lower and length of the term is for one year. However, if the loan amount is large (using the contribution room carryover), the loan term can be extended up to 5 years. Since the RRSP is an annual contribution, it is recommended to keep the length of the term to one year.

A secured loan is when the borrower pledges personal asset as collateral for the loan. Unfortunately, not all personal assets are considered as collateral since the purpose of the secured loan is that in the event that borrower defaults, the creditor takes possession of the asset used as collateral and may sell it to satisfy the debts. Here are some of the assets considered as a collateral :

          ♦ Various vehicles                                ♦ RV (Recreational Vehicle)
          ♦ Deposit                                             ♦ Whole Life Policy cash value
          ♦ Boat/Motorcycle/Snow Mobile           ♦ Mobile/Pre-fabricated Home
          ♦ Airplane                                            ♦ Corporate/Municipal Bond
          ♦ Canada Savings Bond                      ♦ Publically Traded Stocks

Any assets that can be readily converted to cash is most favorable and will provide favorable terms and rates for the borrower.

Within 48 hours is a normal approval time, however, depends on the asset; it may take longer to assess the value and increase the approval procedures.

Fully Secured Loan- Secured loan using funds held with Sharons Credit Union. You can borrow up to $750,000 with terms to maximum 20 years and rate of interest charged will be lower.

Auto Loan- Secured using new vehicle (new or used) purchase or existing vehicle. Depends on the age and the type of vehicle, you can borrow up to 100% of the value of the vehicle to a maximum of $100,000. Terms of the loan is up to 5 years however, you can pay off the loan before maturity without any penalty.

Secured using various boat, motorcycle, snow mobile and airplane are same terms and conditions as auto loan. Also, RVs and Mobile homes loans are included as part of auto loan.

Other Secured Loan- secured using bonds, stocks and other assets not included above. Rate of interest and amount of borrowing depends on the collateral. Therefore, you would need to speak with our loans officer to discuss in detail.

L.O.C., also known as revolving credit, is a credit facility for the purpose of overdraft protection. Normally, LOC is set up to overcome short-term liquidity situation and is attached to your chequing account. Once approved, you can utilize the LOC up to the approved limit at your disposal and interest is only charged for the amount that you use. Since the LOC is variable rate, keep in mind that the interest rate can change without notice.

Transfer of an interest in property to a lender as a security for a debt is called mortgage. Secured against real property up to lesser of 95% of appraised value or purchase price. Maximum amortization is 25 years and the terms of the mortgage can be fixed or variable and can also be set up as home equity line of credit, a.k.a. Prime Line.

Conventional Mortgage- lesser of appraised value or purchase price up to 80% is considered conventional

High-Ratio Mortgage-C.M.H.C (Canada Mortgage & Housing Corporation) insures up to lesser of 95% of the appraised value or purchase price and consumer must pay up to 2.75% of premium for this service. Amount of premiums you pay is determined by the percentage of the property you need to borrow against:

          ♦ Up to and including 65%      0.50%     
          ♦ Up to and including 75%      0.65%  
          ♦ Up to and including 80%      1.00%  
          ♦ Up to and including 85%      1.75%   
          ♦ Up to and including 90%      2.00%   
          ♦ Up to and including 95%      2.75%  

One main benefit of dealing with Sharons is that you will receive annual dividend paid back to you, tax-free. Interested? Ask us about our CreditMaster Mortgage and its other benefits, you won’t be disappointed.

When you currently have 1st mortgage with one institution and would like to borrow using your home as security, this is called second mortgage. 1st mortgagee has priority if debt is defaulted and therefore the 2nd mortgagee is more risky. Usually rate of interest charge is higher than 1st mortgage (1% above 1st mortgage posted rate) and if the total amount of borrowing is above 80%, it will require CMHC premium to insure the loan. The premium can go as high as 4.75% of the 2nd mortgage request (95% financing).

Unlike standard mortgage, Credit Master Mortgage loan allows you to borrow against your real property over and over again without having to go through lawyers or notary public. Once your real property is registered, as long as your income qualifies and you have enough equity in your home you can borrow for your needs. You can also break up your mortgage into term loan, variable rate term and Prime Line (line of credit) to fit your needs.

Line of Credit secured by real property is called Prime Line.  With Credit Master Line of Credit, you can borrow up to $500,000 and if necessary, you can convert portion of your LOC to term loan. Interest charged on Prime Line is variable and will float with credit union’s prime rate. Also, as prime rate changes, Prime Line rate can change without notice to the borrower.

Difference of outstanding mortgage amount and total value of real estate is called Equity. Using the equity to set up line of credit is called Equity Line. If you hold Credit Master mortgage with Sharons Credit Union, you can borrow up to $25,000.