Credit unions have increasingly been competing with the controversial payday loan market. We recently blogged about London Mutual who are offering payday-style loans at lower interest rates than from existing payday loan providers.
Credit unions have received vocal support from the likes of Ed Miliband and the Archbishop of Canterbury. Now credit unions have received a major boost from Britain’s biggest trade union.
Unite has launched a panel of “carefully vetted” existing credit unions so that members can easily join well established credit unions in their area.
The move comes two months after trade union Unison created a similar network of nationwide credit unions to help impoverished members deal with personal debt issues and other financial difficulties.
Unite have said that their service is available to all its members in England, Scotland and Wales.
Rates from credit unions are typically much lower than those offered from payday lenders. Unite have said that somebody borrowing £1,000 over a year could save around £685 by borrowing from then instead of a payday loan company.
There are currently more than a dozen credit unions on the Unite panel including East Sussex, Leeds City and London Plus.
Beverley Budsworth of The Debt Advisor said: “It’s great to see a viable alternative to payday loans. I often see clients who are having difficulty paying back payday loans due to the high interest rates and charges. Any moves to make it easier to borrow money from the credit unions will get my support”.
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