Those looking to compare loans as the beginning of 2007 approaches could benefit from a report from the Association of British Credit Unions (Abcul).
Abcul states that credit unions are able to offer “safe and easy” finance options such as lower-cost loans.
According to the association, loans from most credit unions cost the borrower less than one per cent per month of the reducing balance – equal to a 12.7 per cent annual percentage rate.
Therefore, a loan of £1,000 would incur a repayment of £1,067 over a 12-month period, with no penalties incurred if the borrower decides to repay the whole amount early.
“Borrowers only pay interest for the amount of time they’ve had the money,” said Mark Lyonette, Abcul’s chief executive.
In addition, Mr Lyonette stated that loans from credit unions are backed by the Financial Services Compensation Scheme and include life insurance cover at no extra cost.
Credit unions began in the 19th century, Abcul states, with over half of the population in Ireland currently belonging to one.
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