Small loans the credit union way
Life has an uncanny way of dealing us bad cards from time to time and we can all find ourselves needing financial help when we least expect it.
Maybe your car has failed the MoT and you have vehicle repairs to pay for, or your washing machine stops spinning?
Sometimes small loans over a short period are all that you need to bridge the gap.
Unfortunately, far too many people in Wales see payday lenders as the simplest way of getting money as quickly as possible, sometimes without investigating the long-term cost.
If you intend to borrow using a small loan, then always check the interest rate, term of the loan and total amount repaid to be sure you are getting the best deal.
For example, Satsuma offers a £300 loan over six months with an interest rate of 535% APR. This means a borrower will pay £268.80 in interest and repay a total amount of £568.80.*
In comparison Cambrian Credit Union, which offers savings and loans across north and mid Wales, can offer the same loan at 42.6% APR which means you only pay back £331.82 over all.*
In this example, the money paid in interest with Cambrian Credit Union is just £31.82 compared to £268.80 from Satsuma.
Unlike many lenders, a credit union charges interest on the reducing balance of the loan, which can help save you money over the term of the loan.
When you borrow from a credit union, you can also pay the loan back in many different ways.
If you’re employed by a business or organisation that is a payroll partner with a credit union, then you can opt to repay it directly from your salary.
You can also repay the loan from your benefits if you pay them into the credit union through the PayPoint network, from your bank account by direct debit, or with cash at local offices or collection points.
*Loan rates correct at time of writing – April 3, 2019.