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.

What is a credit union?

It’s a non-profit financial organisation, known as a co-operative. Every credit union is owned by its members, the people who save and borrow from it.

You can find out more about credit unions and how they operate on the Citizens Information website.

How to join a credit union

To join, you’ll need to share a common bond 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. Other common bonds include:

  • Your job or employer: Industrial credit unions operate for employees within certain sectors e.g. health professionals, teachers, army personnel or An Garda Síochána.
  • Membership of a club or society: If you belong to a club, association or society that has a credit union, you’re eligible to join.

You’ll need to provide proof of:

  • Your identity
  • Your address
  • Your PPS number

You can contact the credit union you wish to join to find out their exact membership requirements.

What type of loans do credit unions offer?

It can vary from one credit union to another, but here are the main ones:

  • Personal loan
  • Car loan
  • Home improvement loan
  • Student loan
  • Back to school loan
  • Holiday loan
  • Wedding loan
  • Christmas loan

Most are open to considering loans for other reasons, too. You could also get a loan to pay off other debts e.g. credit cards, so you just have one affordable payment to make.

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It only takes a few minutes to find the best loan for your borrowing needs.

Can you get a green loan?

Yes, many credit unions offer low cost green loans if you’re planning to increase your home’s energy efficiency, or if you’re upgrading to an electric car.

You can also apply for CU Greener Homes, a one-stop-solution for members thinking of large-scale, home energy upgrades. The package includes:

  • A grant of up to 40% of the improvement cost
  • The grant application process managed for you
  • The BER assessment and works managed for you
  • A competitive low cost loan

Here’s more on how the greener homes loan works and what type of improvements are covered.

Compare other home improvement loans here

Why choose a credit union loan?

Getting a loan from a credit union offers different benefits to borrowing from a bank:

  • High approval stats: By looking at each application on a case by case basis, they are able to say yes to most borrowers.
  • Flexible payment terms: With most credit unions, you can choose to make weekly, fortnightly or monthly repayments.
  • Get interest back: Some credit unions may offer a rebate on some of the loan interest paid over the year. This could bring the cost of borrowing down further.
  • Free loan protection insurance: At no cost to you, in the event of your death, your debt will simply cease so your family doesn’t have to worry about extra expenses.
  • Repay early penalty free: If you find yourself able to pay the final loan balance before the term ends, you won’t incur any charges, and you’ll save money in interest.
  • No hidden nasties: No hidden fees or charges on loans and no admin or transaction fees.
  • Flexible loans: If your situation changes and you’re falling behind on your payments, they can be restructured to make them more affordable.

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

If you apply online, you may still have to go into your local branch to finalise the loan terms.

Each credit union works a bit differently and may require different documentation or consent, so it’s best to check their website or give them a call if you need more information.

How much can you borrow from a credit union?

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, 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.

Can you get a loan without savings?

Yes. It depends on the credit union, but the large majority credit unions will allow you to join and apply immediately for a loan, without having any savings.

How much does a loan cost?

Each credit union sets their own interest rates so the cost will depend on:

  • the credit union you belong to
  • the type of loan
  • how much you borrow
  • the term
  • your credit history
  • the type of borrower you are*

*In some cases, you may be offered a discounted rate e.g. if you’re borrowing for the first time, or if you have savings within the credit union already.

There is an agreed standard for the maximum loan rate which is 12% or 12.68% APR (Annual Percentage Rate). However, many credit union APRs are much lower than that.

You can see the average rates charged by credit unions across Ireland for different types of loans on the creditunion.ie website.

Will your credit union loan be approved?

This depends on your individual circumstances, but the approval process is slightly different than when you apply for a loan from a bank.

Your application will be assessed individually by a loan officer or member of the credit committee. 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.

Can you 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.

Why choose a credit union?

There are lots of benefits of joining a credit union, here are some of the main ones:

  • Not for profit: Unlike banks there are no shareholders to pay, which means credit unions operate for the benefit of members, who can benefit from lower rates and rebates.
  • The personal touch: Credit unions have branches in nearly every town in Ireland. You can sort out your finances face to face or over the phone, rather than online if you wish.
  • Customer Service: They are known for their customer service; winning the CXi best customer service award for seven years in a row from 2014-2021.
  • Flexible approach: Credit unions may be able to lend in situations where banks can’t, e.g. a poor credit history, and can also help to restructure your payments if things go wrong.
  • DBI: Death Benefit Insurance is a unique service offered by some credit unions to help pay for end of life expenses. It pays a fixed lump sum in the event of death and where death is as a result of an accident, the lump sum can be doubled.
  • Override probate rules: You can also nominate someone to receive up to €23,000 from your credit union accounts when you die, without having to go through probate.

For alternative ways to borrow, check out our credit card comparisons and loan comparisons to compare deals from the top lenders in Ireland.

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Credit union loan FAQs

How long does it take to be approved for a credit union loan?

Most credit union loans are approved within 24 hours with a fraction taking longer than two days.

Do you need to be a member of a credit union for a particular amount of time before borrowing?

Not necessarily. The vast majority of credit unions will allow you to become a member of a credit union then apply for a loan straight away.

How much will my credit union 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 what your repayments will be 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 to anything.

Can you get a credit union loan with bad credit or no credit history?

Just because you have bad credit history 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.

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.

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 themselves remain financially stable.

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It only takes a few minutes to find the best loan for your borrowing needs.

Warning: The cost of your monthly repayments may increase. Warning: you may have to pay charges if you pay off a fixed rate loan early. Warning: If you do not keep up your repayments you may lose your home. Warning: If you do not meet the repayments on your loan, your account will go into arrears. This may affect your credit rating, which may limit your ability to access credit in the future. Information provided and Interest rates quoted valid at 05/12/2022