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.
It’s a non-profit financial organisation, known as a co-operative that’s run by and for its members. Each credit union is made up of a group of people that share a common bond.
You can find out more about credit unions and how they operate on the Citizens Information website.
You’ll need to find a credit union that you share a common bond with.
Living or working in the same community counts as a common bond, so you could start by checking for unions in your area. Other common bonds can include:
You’ll then need to provide proof of:
You should contact the union you wish to join to find out their exact membership requirements.
You can apply for a loan for almost any purpose, here are some examples:
The specific loans on offer will vary from one credit union to another, but 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.
Yes, a CU Greener Homes loan could be ideal if you’re looking to improve the energy efficiency of your home. You could get:
Here’s more on how the greener homes loan works and what type of improvements are covered.
Check that this loan is right for you by comparing it against other green home loans.
Getting a loan from a credit union offers different benefits to borrowing from a bank:
Once you’re a member of a union, you can apply:
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 call your union to discuss your needs so they can advise you.
You could apply for a home improvement loan for up to €100,000, but other loan types have much smaller maximum values. You’ll need to check what your credit union offers, as they do vary.
The amount you can actually borrow will depend on your individual financial circumstances, your credit record and your ability to pay the loan back.
Each credit union sets their own interest rates so the cost will depend on:
*In some cases, you may be offered a discounted rate e.g. if you’re borrowing for the first time.
There is an agreed standard for the maximum loan rate however, which is 12% or 12.68% APR (Annual Percentage Rate).
You can see the average rates charged by credit unions across Ireland for different types of loans on the creditunion.ie website.
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.
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:
Here’s how to check your credit report for free and ways to improve your credit score.
There are lots of benefits of joining a credit union, here are some of the main ones:
If you don’t share a common bond and are unable to join a credit union, there are other ways to borrow. Check out our credit card comparisons and loan comparisons to compare deals from the top lenders in Ireland.
You’ll usually get a decision on your application within two days.
A credit union can’t charge more than 12.68% APR (Annual Percentage Rate) and most of their loans are offered at a lower rate than this.
The amount you’ll pay depends on things like:
You can get an idea what your repayments will be by using the 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.
It’s a loan for people who get social welfare payments and may have considered borrowing from an expensive moneylender.
You have to join a credit union to be eligible for the loan, by finding a common bond such as location, and not all credit unions in Ireland offer it.
Find out more about how to apply for the loan and which credit unions offer it on the itmakessenseloan.ie website.