Why a Credit Union Loan is Unbeatable

Community 6 min read

22 May 2019

When you apply for a loan through your local credit union, you can be assured of an open-minded, honest and transparent process. Credit unions will always give you a fair hearing. Credit union loan officers take the time to understand the wide-ranging reasons behind each and every loan application, and will do their utmost to approve the loan.

Credit union loan terms and conditions are straightforward, and will never have any hidden fees or administration charges. Staff will work with the potential borrower to ensure loan repayments are structured in a way that best suit their circumstances.

Below are six reasons why a credit union loan is a cut above the rest!

Fair loan interest rates

Credit union loan interest rates are fair – and they are also capped by law. The maximum credit unions can charge on loans is 12.68% APR – and in reality credit union loan interest rates are much lower than this. 2018 figures show that the average rate charged by a credit union on a one year personal loan is 7.1%. On a secured one year loan, the average rate is 6.0%. The lowest rate charged on a one year personal loan is 6.2% and on a secured one year loan is 2.0%.
 
In comparison to credit card interest rates (between 13% and 24%) and those of licensed moneylenders (as high as 288% including collection charge) credit union loans are much more affordable. Find out more about the benefits of credit union loans here. 

Loan flexibility

With a credit union loan, you have the flexibility to either repay the loan ahead of time, or restructure your repayments if you find you can no longer afford them. There are never any financial penalties or hidden costs for doing this. Credit union loan officers understand that financial circumstances can change, and will work with you to adapt repayments if needs be, to better suit your individual situation.

The human way to get a loan

A credit union loan is the human way to get a loan. What does this mean in practice? A credit union loan officer will always give you a fair hearing. They are open to all of the myriad reasons behind loan applications. The credit union loan officer will do everything they can to grant you the loan, taking into careful consideration your individual circumstances and your ability to repay.

Credit unions constantly go above and beyond for their members. In fact, Irish credit unions hold a world record for customer experience! They have been ranked the number one organisations for customer experience in the national CX Insights study for five consecutive years. This has not been achieved by any other organisation in the world!

Straightforward and transparent loans

Credit union loans will never carry any hidden fees, nor will there ever be any administration charges added to the cost of your loan. The final cost of credit which you agree to will always be the final cost. Unless you opt to change the terms of your loan. The T&Cs attached to credit union loans are always very straightforward. And credit union loan officers are always more than happy to go through all the small print with you. They'll be more than happy to explain any financial terms you might be unsure of.

Online loan enquiry

Most credit unions will have an online loan enquiry option on their website. Many of these will show you at a glance the cost of credit and APR rate. In addition, there is also an option to send a loan request directly to the credit union. They will then contact you to discuss the next step in the loan process and talk you through your options. All without leaving the comfort of your home! You can check out the loan enquiry tool here. 

Ethical loans

A credit union loan is an ethical loan. Credit unions do not exist to make profits or to exploit those who are in need of financial assistance. Those who borrow from credit unions are known as members, and it is you, the member, who own the credit union. Key to the lending decision made by the credit union is your ability to repay the loan. The credit union loan officer will look at your income and outgoings to determine what will best suit your circumstances. They will never suggest that you take on a loan that will result in unnecessary debt or financial stress.
 
Credit unions are open to all types of loans. Home improvements or home loans, a new car, a dream wedding, the holiday of a lifetime, kitting the kids out for school, dental work or maybe expanding your business. You can contact your local credit union to enquire about the full range of loans they offer. Not a member? Not a problem, check out our short blog on how to open a credit union account.