@Anonymous wrote:
Hello everyone! So I did some research on the forums in regard to the NFCU CLOC. I still have some debt to pay off and read that NFCU's cloc is like a personal loan but with lower interest rate compared to other loan companies. I intend on using this to pay off the very few baddies I have while kindly paying back this loan with the best intentions. If I am wrong, please correct me on this! I wanted to apply last month but the CS they pulled monthly was Fico 9 EQ 571. After paying off a collections and having it deleted, and a CO my score updated to Fico 9 EQ 629. I heard people getting approvals for even their credit cards in this range so I decided to apply. I called them up to do this and told the rep I wanted to apply for 1500. Got the message of awaiting approval from an officer. About 20 hours later I got an email saying they needed more information from me and to give them a call or wait for a call. Decided to call them and spoke with a rep who told me I was not denied but rather they can only approve 500 to start with. I accepted and was told I would get a decision in 2 hours. Lo and behold I got an email stating I was approved @ 14.9%. If it matters, my util was 7% on 2 cards that are carrying a balance (Now paid off) and 2 CO baddies on my report.
Some questions though. . .
If possible, how often do they increase the limit? Is it done automatically or do you have to call in? How many months in between? And while I understand this is a type of loan and not a credit card, I read that interest starts immediately. I feel entirely stupid for asking but can someone explain to me how this works? Do they charge interest every day you have a balance after it reports? Is it per transaction or the overall balance you have? Or is the interest charged monthly? Like I said before, I would use this to help with some of the baddies and pay it off ASAP to build further reputation with them. If I am entirely wrong on this, please correct me. Thank you!
No grace period on a CLOC. You get charged on what you use.
If timing works just perfectly it might help you avoid other interest.
For this example we will say you have exactly one credit card and the CLOC.
You have a zero balance on your credit card.
You spend $400 on your credit card.
The charge posts June 1st.
Your card statement is June 1st through June 30 th.
The card issuer generates a statement with payment due date of July 25.
At this moment in time you have the minimum due but you will not have enough for the full $400 until your paycheck is direct deposited on July 31.
In this case you withdraw enough money from the CLOC to pay the credit card in full.
By accruing interest on the CLOC withdrawal for about a week you have paid the card off in full and thus avoid getting hit with trailing interest on upcoming purchases on the credit card.
Do not cut numbers dangerously close in real life.
This was just a quick example.
If the credit card was issued by NFCU you won't be able to directly pay the credit card with the CLOC but you should be able to go from CLOC to checking to credit card.
Edit: If you have collections that this money can allow you to fully resolve focus on that.
My example was just trying to explain interest.
