Today, the Financial Times reported that membership of credit unions has doubled over the past decade. The current number of members stands at 1.5 million, almost on a par with those using Pay Day loans which currently totals 1.6 million.
Whereas Credit Unions have typically been viewed as places for saving, more and more people are now turning to the unions for loans and mortgages. This is partly due to distrust in banks following the financial crisis and in part due to dangerous Pay Day lending, which new regulations are set to tackle. Though we are currently experiencing a period of relative financial calm, it is essential for us to take proper measures to ensure that we are prepared for the inevitable storm set to break with the rise of interest rates.
Emergency loans with credit unions are at a fraction of the interest rate of those offered by pay day lenders and are a much safer way to tackle financial shocks. The loans are typically charged at 42.6 per cent interest rate per year, compared to Pay Day lenders who charge interest at 1000 per cent and above.
Our Debt Waiver product also ensures that, should you take a loan out with one of the Credit Unions we insure, your loan will be protected should you experience any dramatic changes in your financial circumstances. Following the results of our financial fragility survey last month, it is easy to see why Credit Union membership is on the increase.