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Most credit unions loans will cost you no more than 1% a month on the reducing balance of the loan (an APR of 12.7%). What this means for example is that if you borrowed £1000 over 1 year, you would repay no more than £1067 in total. Many credit unions charge less, some may charge more but by law this cannot be more than 2% a month on the reducing balance (an APR of 26.8%). You can find out about what loans and interest rates are on offer at your local credit union by contacting them via the Credit Union Search section.
Credit union loans come with no hidden charges and no penalties for repaying the loan early. Life insurance is built in, at no cost to the borrower, so if you were to die before you had repaid the loan, insurance would repay the loan for you.
When you borrow from a credit union, you may carry on saving, meaning that by the time you finish repaying the loan your savings have grown as well. You can work out how much a credit union loan could cost you by using our handy Loan Calculator.
Most credit unions can lend for up to 5 years (unsecured) and up to 10 years (secured). Some credit unions can lend for up to 10 years (unsecured) and up to 25years (secured).
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