Spring 2003 Newsletter
The Pros and Cons of
Home Equity Debt Consolidation
For many years, the idea of tapping the equity
in your home was financially smart when
looking to make home improvements or fund a college education.
Consumers now rely on Home Equity loans to make large purchases
(to buy new vehicles, for instance) and consolidate higher interest
debt such as unsecured loans and credit cards.
Although, initially this is a sound way of managing
debt, some sources claim that the equity in your home should
be left as your nest egg. According to Dorothy Rosen in a recent
bankrate.com article, using a Home Equity loan to consolidate
debt could have a negative impact on your finances.
• When people use debt to payoff debt, they often do not
change their spending habits resulting in further debt.
• When the terms of a Home Equity loan are stretched over
a long period of time, the consumer could actually end up paying
• When a Home Equity loan is used to finance debt, you
can risk foreclosure on your home in the event of financial
As long as you realize that your debt is simply
transferred and not actually paid off, a Home Equity loan can
be a financial benefit.
• Interest paid on a Home Equity loan is generally tax
deductible (consult a tax advisor for determination).
• Interest rates on Home Equity loans are much lower than
rates on most credit cards, making it possible to shorten the
term of payback.
• In some cases, where multiple debts are combined, your
new payment may actually be less than the combined total of
When you get set to refinance, you’ll want to find the
right type of Home Equity loan and set a goal for when you want
your debt paid off. Use your new-found credit card freedom wisely
by not spending more than you make and putting a little aside
each pay period in a “rainy day” savings account.
Need help deciding what’s best for your finances? Contact
the Credit Union for more information about Home Equity loans
and the benefits of consolidating debt.
Low Dealer Rate May Not Be The Best Deal
You’ve seen the ads. 0% financing! The dealers’
rates seem great. What could be wrong with this low rate? Plenty, if
you take a closer look.
1. These low rates are often only available to those with the best credit
records. One small credit blemish, and the rate goes up.
2. Many of the companies are offering these low rates for short terms,
up to 36 months or less. That increases the amount of your monthly car
3. The rates are sometimes only offered on certain slow selling models,
leaving out the most popular cars and trucks.
4. In some cases, accepting dealer financing means you forfeit your
opportunity to get a rebate on your purchase, making the purchase price
of the vehicle higher.
Additionally, consider the total cost of the loan. Will you be charged
an application fee? Is there a pre-payment penalty? What will be your
monthly payment? Then, be sure to compare your total payments!
You’ll find your best deal could come from skipping the low dealer
rate, taking the dealer rebates, and financing your vehicle with the
Credit Union. We will be happy to help you figure out how much the dealer
financing will cost compared to an auto loan from us. Call the Credit
For your protection
USA Patriot Act
Soon, all financial institutions will be required to comply with the
USA Patriot Act’s “know your customer” requirement.
The Act will require credit unions to verify a member’s identity
when opening an account or adding a joint owner.
As with showing identification before a transaction, these precautionary
steps are designed to reduce members’ exposure to fraud, identity
theft, and, ultimately, terrorist acts.
We appreciate your cooperation and understanding in this matter of national
concern. The Credit Union will do what is required by law and reason
to protect your
Youth Count at North Penn
Federal Credit Union
Struggling for economic prosperity is difficult for everyone. It’s
especially hard for young people who’ve never learned how to plan
to achieve financial security. What we need today, confirmed by poor financial
literacy test scores from across the country, is leadership to help raise
the awareness of financial issues for young people.
staff and members of the Credit Union are ideally positioned to respond
because we believe in the power of education, put to practical use, to
improve the lives of our members and their families.
Our tradition of service and philosophy of self-help make our Credit Union
and all credit unions a natural source of leadership in the fight against
Join us this year, as we celebrate National Credit Union Youth Week from
April 13-19. What a great time to talk to your family about spending and
saving, whether for a new bike or college!
For more information, come in or call the credit union today!
Penn Color, Inc.
Joins Our Credit Union Family
NPFCU would like to extend a special welcome to the employees of Penn
Color, Inc. of Doylestown and Hatfield, PA into our field of membership.
We extend a friendly welcome to these new Credit Union members and invite
them to use the many services available to
The North Penn Federal Credit Union’s annual meeting will be held
on Tuesday, April 22, 2003 at 12:30 p.m. in the Lunch Room at the Credit
Union office. Please join us and vote for your credit union leadership.
GOOD FRIDAY - Friday, April 18, 2003
MEMORIAL DAY - Monday, May 26, 2003
INDEPENDENCE DAY - Friday, July 4, 2003
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