How to get a credit union loan in Ireland
Joining a credit union could give you access to lower loan rates and other benefits. Here’s how they work, what loans you can get and how to apply.
How credit union loans work
Credit unions (CUs) are community-owned, not-for-profit lenders. When you become a member, you’re joining a local financial co-operative where members’ savings are used to fund loans.
Interest charged on loans to members generates income for the CU.
Credit unions are regulated by the Central Bank of Ireland and must follow strict lending rules. Many now offer online applications, digital onboarding and same-day approval.
Credit union loans and rates
Credit unions typically charge lower interest rates than high-cost lenders and offer interest on a reducing balance, meaning you only pay interest on what you still owe.
Most credit unions offer a wide range of loan types, including:
| Loan type | Typical APR (Annual Percentage Rate) range | Best for: | |
|---|---|---|---|
| Personal loans | 8%-12% APR | for a range of needs - including holidays, weddings | |
| Car and EV loans | 6%-10% APR | to buy a new or used vehicle or EVs | |
| SBCI Energy Upgrade loans | 4%-5% APR | for energy upgrades like solar PV, insulation | |
| Home improvement loans | 5%-9% APR | for renovations, repairs, upgrades | |
| Student and education loans | 5-7% APR | for those in 3rd level education | |
| Secured loans | 4%-6% APR | lower rates for longer term borrowing backed by savings | |
| Debt consolidation loan | 10%-14% APR | for combining your existing debts into one affordable monthly repayment | |
| It Makes Sense loan | Max 12.68% APR | for those in receipt of social welfare |
The maximum loan rate credit unions can charge is 12% or 12.68% APR (Annual Percentage Rate). However, many credit union APRs are much lower than that.
How much do CU loans cost?
As with a traditional bank loan, the higher the APR, the more you will pay for borrowing.
Each credit union sets its own interest rates, so APRs can vary. You might get a discounted rate if you’re a first time borrower, or if you have savings in the credit union.
The loan rate you’re given takes several factors into account, such as:
- the credit union you belong to
- the type of loan
- the borrowing terms
You can check the average national CU rates charged at creditunion.ie. Always check with your local credit union before applying.
How much can you borrow?
It varies between each credit union and the loan type, but you could borrow as little as €500 up to €40,000 or €100,000 from a credit union - and anywhere in between.
The amount you borrow will also depend on your individual financial circumstances, your credit record and your ability to pay the loan back.
Do you need to be a member of a credit union before borrowing?
Yes, but the vast majority of credit unions will allow you to become a member of a credit union and then apply for a loan straight away.
You can therefore apply for membership and a loan all in the same day.
Find out more about credit unions and how they operate on the Credit Union website.
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It only takes a few minutes to find the best loan for your borrowing needs.
Why choose a credit union loan?
Getting a loan from a credit union offers different benefits to borrowing from a bank:
For alternative ways to borrow, check out our credit card comparisons and loan comparisons to compare deals from the top lenders in Ireland.
How to join a credit union
To join, you’ll need to share a common bond (have something in common) with a credit union. This bond can be a shared locality, workplace or club.
Most members join the credit union where they live or work, and you can check what credit union operates in your area using the credit union locator.
Examples of a common bond
What documents do you need to join a CU?
You’ll need to provide evidence of your identity and address, such as:
- Photo ID: Valid signed passport, driving license
- Proof of address: Utility bill, bank statement, DSP or Revenue letter within 3 months
- Personal Public Service Number (PPSN): a copy of your PPSN documentation
Do you need to save with a credit union?
Not always. Many credit unions now allow new members to apply immediately. Some CUs still prefer members to save regularly first, or may offer better rates to established savers.
What are the benefits of joining a credit union?
Unlike banks, CUs are not for profit. There are no shareholders to pay, which means credit unions operate for the benefit of members, who can benefit from lower rates and rebates.
There are other benefits of joining a credit union; here are some of the main ones:
Compare loans today
It only takes a few minutes to find the best loan for your borrowing needs.
How to apply for a credit union loan
Once you’re a member of a credit union, you can apply:
- By phone
- In person at your local credit union branch
- Online
5 steps to apply for a CU loan
Each credit union works a bit differently and may require different documentation or consent, so it’s best to check their website or call them if you need more information.
- Become a member: You’ll need to meet the “common bond” (usually where you live, work or study) and provide photo ID, proof of address and PPS number
- Prepare your documents: The CU will need to assess your affordability, so you’ll need to gather recent payslips, 3 months bank statements, social welfare payments (inc. pension) proof of self-employed income, i.e Revenue assessments or accounts.
- Submit your application: Apply online, by telephone or in-branch. Many credit unions now provide an online portal to manage your application and upload documents.
- Credit assessment: Your CU will review your income, outgoings and ability to repay. They will also access your credit history via the CCR to assess your risk profile.
- Approval and drawdown: Some credit unions can approve loans on the same day. Funds are usually released directly to your account.
Although it’s easy to apply, if you fail to make the repayments on your loan, your account will be placed in arrears. This may impact your credit rating, potentially limiting your future access to credit.
How are credit union loans approved?
It depends on your individual circumstances, but the approval process differs slightly from applying for a bank loan.
Your application will be assessed individually by a loan officer or credit committee member.
They will consider things like:
- Past borrowing and any savings you have
- Your Central Credit Register (CCR) report
- Whether you can comfortably afford to repay the loan
Here’s how to check your credit report for free and ways to improve your credit score.
How long does it take to get a credit union loan?
Once your loan application and supporting documents are submitted, and your credit history has been reviewed, most credit union loans are typically approved within 24 hours. Some applications may take up to two days.
If you require a guarantor, they’ll also need to provide supporting documentation.
Can you get approved for a credit union loan with bad credit?
Just because you have a bad credit history, or no credit history at all it does not mean you will be refused a loan outright.
Each credit union will look at your current capacity to pay and assess every case as it comes.
Credit union mortgages
Many credit unions also offer mortgages. Each branch sets its own interest rate at local level, offering some of the country’s lowest rates.
You can find a list of participating credit unions here. Although credit union mortgages are not available to all members, that is about to change.
Regulatory changes coming in during 2025 will mean every credit union in the country will be able to offer mortgages, business loans, current accounts and debit cards.
Credit union loan FAQs
What is the It Makes Sense loan?
It’s a loan for people who get social welfare payments and may have considered borrowing from an expensive moneylender. The scheme is currently available in more than 100 credit unions across the Republic of Ireland. Check if your CU is participating.
Find out more about how to apply for the loan and which credit unions offer it on the Credit Union’s It Makes Sense loan page.
How much will my CU loan repayments be?
The amount you’ll pay depends on things like:
- The frequency of the repayments e.g, monthly or weekly
- The interest rate you’re charged
- The amount you borrow
- The term you borrow over
You can get an idea of your repayments by using the loan calculators available on most credit union websites. The interest rate used in the examples may not be the rate you get, so check before you sign up for anything.
Can I get an interest rebate?
You may be able to get a rebate on some of the interest you’ve paid on a loan at the end of the financial year.
According to the Irish League of Credit Unions (ILCU) just over 50% of ILCU affiliated credit unions gave loan interest back to their members in the financial year ending September 2019, with an average rebate of 9%*.
*This is based on data analysis from 217 ILCU affiliated unions in Ireland, 2020.
How are credit unions regulated?
The Central Bank of Ireland has a department called the Registry of Credit Unions that regulates and oversees credit unions.
Being regulated means that the member’s funds are protected and the credit unions remain financially stable.
