Don’t get financially snowed under this Christmas period.
Up to 350,000 people in the Republic of Ireland use the services of moneylenders, with an estimated €153 million owed to moneylenders, which can charge an interest rate of more than 23 percent APR.
In Ireland, there is no law which states the maximum rate which a licensed moneylender can charge. However, in practice, the Central Bank can refuse to grant a licence if it decides that the rates to be charged will be excessive.
The Moneylender Register details the maximum rates that licensed moneylenders can currently charge. The maximum rate of APR, excluding collection charges, that moneylenders are licensed to charge goes up to 188%. The maximum rate of APR, including collection charges, can be as high as 287%.
In practical terms, what does this mean?
Let’s say you get a €500 loan from Athlone Credit Union which you will pay back in six months. Athlone Credit Union charges 11.06 percent APR. At the end of the six month period, you’ll have paid back €13.69 in interest (€513.69 repayable in total ).
Contrast that with a moneylender
For the same loan from a licensed moneylender, you could be charged up to 187% APR and you’ll end up paying back something north of €150 in interest – ten times the amount of interest paid to the Credit Union. That’s a whopping €650 repayable in total!
Whatever financial difficulties you or your family might be facing due to the coronavirus, entering into a loan agreement with a moneylender could well lead you into further difficulty.
If you do need to borrow, look at your options and not just the first one that presents itself. Compare the options and costs – it won’t take long and it could save you a lot of money in the long run. It’ll be no surprise that we recommend that you always talk to your local Credit Union first.
Not alone will you be assisted by a friendly member of staff who will take the time to understand your circumstances and work through what your options might be, you’ll also be dealing with a community-based organisation who is committed to helping people, not to profit from their needs.
And at times like this, that’s even more important than ever.
Head of Lending in Athlone Credit Union, Liam Flannery, urges all our members to contact us if they are looking to borrow for Christmas.
“Our Loans Officers are ready and waiting to help. We understand the financial pressure that Christmas can bring, and this is only compounded by the unprecedented issues that have occurred in 2020. It has been a hard year for everyone.
“Don’t be nervous about contacting your local Credit Union, all we want to do is help where we can and discourage our members and the general public from using high cost moneylenders.
“Don’t forget your local Credit Union is owned by the members it serves. We are here for you and our goal is help members manage their finances in a way that best suits their individual personal circumstances.”
“I would like to take this opportunity to wish all our members and indeed those who are not yet members, a very Happy Christmas from all the staff and management at Athlone Credit Union,” Liam remarked.
Athlone Credit Union is regulated by the Central Bank of Ireland.