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Credit Unions offer alternative to high interest Christmas loans

Swansea Bay Credit Union

People in Swansea are being urged to avoid high interest charges on Christmas loans and to use the city’s credit union instead.

Credit unions are not-for-profit organisations that offer a range of ethical products for savers or those needing loans.

Swansea Council’s Cabinet Member for Supporting Communities, Alyson Pugh, said: “With many people experiencing financial hardship due to the coronavirus crisis many will no doubt be looking to borrow money to see them and their families through Christmas.

“I would urge people to look carefully at the interest rates they could be charged because they could end up paying £1,000 to repay a £500 loan over the space of a year.

“Credit Unions charge much lower rates and work with borrowers to try to ensure that they are able to afford their plans. Interest from a credit union loan is charged on the reducing balance of the loan, there’s no hidden charges or penalties for paying it off early, and many applicants receive free life insurance.

“They are able to do this because they do not make a profit for shareholders. Credit unions are run by members of the community for the community.”

As well as offering loans credit unions also offer safe and secure savings products.