Tour de Lab September 1st

Portland credit union offers bike loans (and they’re not the first)

Posted by on July 8th, 2009 at 5:04 pm

They now offer a bike loan.

Just over a year ago, we reported that Portland-based Unitus Community Credit Union offered a bike loan. Now comes word that a second local credit union, Northwest Resource Federal Credit Union, has a similar program.

According to their website, NRFCU is now offering bike loans, “to help Northwest Resource members get off the gas pedal and step on a bike pedal!” Here are some specifics:

    * Rates as low as 7.50% APR*
    * 12-month term
    * Borrow up to $2,500
    * 100% financing of bike plus accessories

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If you qualify for the loan, you just bring them your purchase receipt and they will reimburse you. They can also make a check out directly to the bike shop if you bring them an itemized invoice.

NRFCU serves the employees of gas company NW Natural and anyone who lives in Portland’s central city neighborhoods.

Now that two credit unions offer a similar loan product, perhaps customers will win due to competition. A quick comparison of NRFCU’s loan versus the Unitus loan shows that this new one offers 100% financing (Unitus only does 80%) and it’s available with a slightly lower APR (7.5% with direct payment from NCRFU account versus 7.99% at Unitus with similar reductions).

Learn more about NRFCU’s bike loan program on their website and compare it to the Unitus bike loan here.

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31 Comments
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    Nancy July 8, 2009 at 6:01 pm

    Forest Park Credit Union has offered this for about a year too. This is from the web site.
    Our Bicycle Loan…It’s new!!
    Did you know that we have a bicycle loan? We do and it is a good one. With all the excellent cycling shops in our neighborhood and all the excellent cyclists all around Oregon we thought it was time to make a loan just for them. So we created a bicycle loan. You can borrow up to a maximum of $5000 for 7%apr at 24 months 8%apr for 36 months terms****.
    Apply online today!

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    sh July 8, 2009 at 6:19 pm

    I’ve been a member of NRFCU for over 8 yrs and they are super! They remember who you are, what your dog’s name is, have great service, and work very hard to be true members of the community.

    This program is just another reason to become a member.

    p.s. I believe if you work in the central city hood, you are eligible to join.

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    Disastronaut July 8, 2009 at 8:39 pm

    “Borrow up to $2,500”

    Pfft, that won’t even cover my wheelset.

    Just kidding.

    Very cool idea I had forgot about. Glad there is another bank getting in on this.

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    Quentin July 8, 2009 at 8:41 pm

    Anyone who needs to take out a loan to buy a bike needs to reconsider the price of the bike they want. If you can’t save two or three thousand dollars for a nice new bike then you should be shopping for a nice, well-maintained used bike that you CAN afford. Cycling is about freedom and simplicity, and you shouldn’t have to put yourself in debt to enjoy it.

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    Michweek July 8, 2009 at 10:23 pm

    You know, if people want to help other people get off the gas pedal, all you gatta do is sell the car. Help them with that, then with the money they make on that sale they can hit up graigslist. BAM! Done, I don’t need no damn loan to get no damn bike, a damn good bike at that.

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    are July 8, 2009 at 11:49 pm

    not that I am in the market for another bike, and not that I would need to spend more than a few hundred if I were, but last year when I was getting rid of my car (ref comment 5) I had zero takers at about half the blue book and ended up giving the thing to charity (where it was sold at auction for about ten percent of blue book). but I agree with comment 4 and would say that you should not go into debt for any consumer goods, period.

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    Matt July 9, 2009 at 1:52 am

    sh is right: If you work OR live in the downtown area, you are eligible to join NRFCU. (And if I remember correctly from when I joined a couple years ago, they have a very generous definition of “downtown”.)

    And I second sh’s love of the union – great people, always going above-and-beyond.

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    Dave Wiley July 9, 2009 at 8:15 am

    @Quentin “Anyone who needs to take out a loan to buy a bike needs to reconsider the price of the bike they want.”

    I couldn’t agree more. If you are using the bike for serious transportation you need to consider that you might have to buy another bike if your first bike is stolen or gets badly crashed.

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    Dave July 9, 2009 at 8:51 am

    Washington’s Twin Star Credit Union, which serves an area from Vancouver to Olympia, also offers bike loans.

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    Esta Nevando Aqui July 9, 2009 at 8:53 am

    Nothing against the bike loan program, and I’m sure the people at the CR are very nice, but record levels of consumer debt are really damaging our economy and putting lower-income people in a financial pattern that really limits their life choices.

    Wouldn’t a better way to encourage people to get on bikes be to offer extremely low cost commuter bikes? Or, wouldn’t the best way for a CU or bank to encourage people to get on bikes be do donate a few bikes each year to worthy recipients?

    I’m not sure making money from loans on bikes is either in keeping with the spirit of biking or really even pro-bike at all, especially with low-cost bikes available at various places around town. Seems closer to the payday loan business model to me.

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    Zaphod July 9, 2009 at 9:49 am

    This is a great thing and adds yet another bit of evidence that cycling is a valid form of transportation to combat the fictional “bike is a toy” stereotype.

    I may find myself taking on some debt to get an improved cargo bike for my business. Like any tool, debt can be properly managed and help move you forward or it can, if abused, drag you down.

    Preaching a “debt is universally bad” is a simple one size fits all viewpoint.

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    f5 July 9, 2009 at 9:56 am

    I too question the greater ethics involved with this type of thing given the current economic situation.

    7-plus %? Can’t car loans be gotten down around 4-5%?

    Talk about soaking poor. And just because ‘anyone’ would qualify doesn’t change the fact that effectively this is what’s happening.

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    Esta Nevando Aqui July 9, 2009 at 10:05 am

    Please go back and read the posts, because no one said anything like “debt is universally bad.” Debt is obviously necessary for a modern economy.

    But is going into debt to buy a bicycle a good choice given the other choices available for owning a bicycle?

    Is loaning money for bicycle purchases really an ethical choice by CUs and banks, or is it a way to profit from poor choices by possibly ill-informed consumers?

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    bahueh July 9, 2009 at 11:39 am

    wow..lots of judgement here…what people want to spend money on and how they spend their money is really nobody else’s business…
    a $5000 loan is a relatively small loan and I doubt the credit unions are giving them out to people who don’t qualify or have questionable credit or employment histories….

    banks are not in teh business of social righteousness (as so many here are) or monetary ethics..they’re in the business of making and managing money based on predetermined risk…

    the rates are higher than auto loans because this is essentially a personal loan…which always have higher interest rates..however car loans offered through my credit union are currently between 4.9 – 14.9% based on credit rating for an auto loan and between 9% – 18% for personal loan….7% is a bargain.

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    Esta Nevando Aqui July 9, 2009 at 12:26 pm

    By that logic, it should be legal to charge someone 1,000% interest on a loan. But it isn’t. Enough of the Market Worship. Sensible regulation of financial markets is well within the purview of the State’s police power.

    And I love the line “a $5000 loan is a relatively small loan.” Well, speaking of righteous, Mr Moneybags, obviously you can’t relate to the financial situation of those who actually need these loans.

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    bahueh July 9, 2009 at 1:03 pm

    esta…step down off your soapbox and think logically K?….in terms of loans…$2500 or $5000 is small..average student debt is probably over $20K, average car loan is probably over $10K…average home probably over $240K…

    as for your assumption as to what I make and can afford…its laughable. I can relate just fine, and I can also see a bigger picture than you’re apparently capable of.

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    Esta Nevando Aqui July 9, 2009 at 2:11 pm

    Yeah, think logically. Nobody who knows anything about economics takes seriously ideas like “what people want to spend money on … is really nobody else’s business.” That’s what caused the financial crisis!

    Now, keep thinking logically, K? Who do these loans benefit most? Now realize my opinion differs from yours and that there’s a damn good reason for it.

    Yeah, big picture.

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    Quentin July 9, 2009 at 2:38 pm

    Obviously people can do whatever they want with their finances, but if $2500 is such a small, relatively easy loan to repay, why not just use your savings to buy the bike? If $2500 is too big a chunk out of your savings, but you rationalize that it’s not too much debt, then aren’t you walking on some pretty thin ice, financially speaking?

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    bahueh July 9, 2009 at 2:41 pm

    I dont’ know, Esta, I have benefitted greatly from most of the loans I have taken out of my credit union…does the credit union benefit from loaning money? sure…they always have and they always will. but good banks loan appropriate amounts to the appropriate people…

    do you know a lot about economics? because I think most serious economists don’t refer to the current recession as a “financial crisis”…that’s the stuff of media and irrational thought.

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    Anonymous July 9, 2009 at 2:54 pm

    Most bike dealers offer financing with deferred interest, some as long as 12 months.

    The key being deferred, the interest racks up and hits once past the grace period, but if you are good with your money, why pay anyone interest if you can avoid it.

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    bahueh July 9, 2009 at 3:48 pm

    Quentin..I don’t disagree, but not necessarily. there are circumstances, however limited, that such a loan may make sense for some. bastardizing a credit union or chastising others whom you presume have more $$ than you isn’t the solution (as someone here seems to think). personal responsibility for personal finances. If someone wants to take out a loan, pay 7.5% interest for a purchase they can afford over 12 months (its about $225/mo.) then there’s an option…is it the best option?
    that’s up for the individual to decide with their bank. the credit union is simply offering a service. if some here think $2500 is too much money, I doubt they’ll use the service.

    would i do it? nope. as stated by “anonymous” most bike shops offer lower rate “loans” than a credit union.

    it is quite disingenous of some here to blame default personal loans for the current lack of available capital…linking the two is a stretch at best. the large majority of personal, auto, and home loans are being paid back on time.

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    El Biciclero July 9, 2009 at 3:50 pm

    I bought my bike with a loan from my CU back in 1992. Made a few payments and then just paid it off. Mostly, it was to establish some sort of credit rating, since at the time, I had no credit cards and had never financed anything. Nowadays, when employers check your credit rating (of all things) to determine your “employability”, it’s not necessarily a bad idea for someone with little or no credit history to take out a manageable loan and pay it off early.

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    buzz July 9, 2009 at 5:01 pm

    The question I have is this: Are you required to carry insurance (home/rent or auto) with these loans? With a car, any bank will make you do it since the car really kind of belongs to the bank until that final payment is made. Maybe someone who has done this can answer that question.

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    Esta Nevando Aqui July 9, 2009 at 6:10 pm

    I guess if the straw man’s all you’ve got, go ahead and knock him down.

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    bahueh July 9, 2009 at 7:41 pm

    Esta Nevando Aqui…I’m guessing you’re grumpy at a loan officer or something? a bank that did you “wrong”? lost your job? pissed at the world for the recession? want to blame it on someone or some institution?
    what can I say…not everyone is in that position…and all we’re left to do is work to improve the position we’re in.
    you’ve delivered nothing here to provide any serious rationale as to why these loans shouldn’t happen or are not necessary for some. you want a business to give away (to you) a low cost commuter bike? sorry…probably won’t happen..and these loans are hardly the “pay day” loans you surmise…the interests rates are hardly that high.
    this isn’t the class warfare story that you seem to be hoping it is…

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    bahueh July 10, 2009 at 9:44 am

    Esta…would you like me to provide you with a list of articles about how micro-credit is assisting in job creation and economic growth, both here and around the world….or would you like to google it yourself?

    straw man indeed…

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    Elly Blue July 10, 2009 at 10:48 am

    Hey Bahueh and Nevando — please steer clear of the dreaded personal back and forth in the comments sections. I’d be happy to get you two in touch privately if you’d like to have a more extended debate.

    Best,
    Elly

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    Steve Bozz July 11, 2009 at 1:34 pm

    Credit unions are typically very prudent about giving out any sort of loans, or even credit cards. Their charter is to work for the benefit of credit union members, not any shareholders or greedy profiteers.

    It sounds like this loan is intended for folks who want to pick up a sweet, expensive bike perhaps to step up their racing/touring game.

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    anon July 14, 2009 at 2:00 pm

    buzz: it depends on how the lender views the loan…usually if it is a loan with collateral there would be insurance required. Due to the loan limits and interest rate I would assume they are viewing this almost like an unsecured loan.

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    sarah gilbert July 14, 2009 at 3:03 pm

    or perhaps this is an alternative to the car loan. lest we forget, the reason car loans exist is that transportation is seen as enough of a necessity that consumers demand to buy the car they can’t wait to save up for. classic example: you have a new job, to which you must travel every morning and from which you must return every evening. because you cannot wait to save up the requisite cash to purchase a new car before you start gaining income from said job, you get a loan.

    my family bike cost around $1500 (including cargo and baby seat options to make it useful, helmets, a couple of lights) and I use it as transportation instead of a car. no sweet touring bike here. without it? I’d be left taking the bus. in order to make bikes a viable transportation option for the working poor, loans are an important tool.

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  • […] Verity Credit Union is entering the fairly young bike loan market, offering its members bicycle loans at a current rate of 6.24% […]

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