This loan is not linked to shares or the length of membership; it is a means-tested loan. This loan is available to members, subject to an interview and the commitment of a direct benefits payment (child benefit).
As these loans of £300 do not bring a surplus to the HCU and take time to initially set up (interview etc) these transactions are viewed as an investment in the member and their future with the HCU. The interest on these loans is 2.23% per month on the reducing balance .
The interest charged on a £300.00 loan over one year paying weekly over 49 weeks with payments rounded up to £7.00 per week is £41.98 (Please Note: the final weeks payment is only £5.98).
This higher interest rate reflects the risk to the Credit Union as the member is new to HCU no history is available on them at this point.
LOAN 3 amount borrowed: £300;
Repayments would be rounded up to £7.00 per week, over 49 weeks, with a final payment of £5.98;
Interest is charged at 2.2% (26.8% Annualised Rate) on the reducing balance would be equal to £41.98;
Total amount repayable = £341.98. APR for comparison is 30.3%
Please note: Interest may vary slightly due to start date of loan and your terms of repayment.