This morning one of our board members asked me to figure out how much money our members can potentially save by financing things like appliances and furniture at the credit union instead of at the store or on a credit card. Here are the results.
To buy at 25 cubic foot refrigerator you will spend around $1250. That’s also pretty close to the cost of a really nice TV, an Apple MacBook, or a furniture suite. To borrow this amount at a typical store account rate of 21% and paying minimum payments of about $40 per month, the total interest paid would be around $575. It would take over three years. (That’s if you start making payments immediately. Sometimes stores offer ‘no payments for 6 or 12 months’. That just postpones your having to pay for it and stretches the loan out longer than it needs to be, oftentimes longer than the warranty on the item you bought.)
The same loan when made at our credit union’s average personal loan rate of 12.31% is much cheaper. At $76 per month that same amount of money would be paid off in 18 months and would only cost you $125 in interest charges. That’s an extra $350 that you’ve saved and you never missed the money because there’s the added convenience of payroll deduction payments.
In all fairness if you were to pay $82 per month on the store account you would bring your total finance charges down to $218 and pay it off in 18 months. That’s only about $100 that you missed out on saving! Then there’s the
pleasure hassle of dealing with the store employees who have foreign accents and try relentlessly to sell you add-on products that you’re not interested in. With that there’s no comparison to hanging out with the nice folks down at the Piedmont CU.
So to make sure you’re getting a good deal, do a little figuring before you do any signing. Here’s a link to our calculators page which among other things can help you figure out how much you can afford before you go shopping. Speaking of shopping, the credit union will be open the day after Thanksgiving to serve you if you run across any fantastic deals.