Wednesday 13 December 2017 puts pressure on credit unions as insurance group branches out to offer loans

It is expected that Chill Money will create up to 50 jobs over the next 12 months.
It is expected that Chill Money will create up to 50 jobs over the next 12 months.

Charlie Weston Personal Finance Editor

Insurance broker has branched out to offer loans, in a move that is set to put pressure on credit unions.

Chill Money will market the loans, with Leitrim-based credit card provider Avant Card acting as the lender and servicer of the borrowings

Avant Card, which used to be called MBNA, is regulated by the Central Bank to issue credit cards and provide loans.

Loans of up to €50,000 are being offered, with repayment terms of between one and five years.

The lending rate will be 12.9pc for amounts just under €10,000, and 11.5pc for loans of more than that, but less than €20,000.

Loans of between €20,000 and €50,000 will have a lending rate of 8.9pc, when expressed in annual percentage rate (APR) terms.

Chill Money claimed it was the first non-bank lender offering consumer loans to enter the market in the past few years.

It claims it will be the “first disrupter to the banks in Ireland”.

The move into personal lending is set to put pressure on the State’s 289 credit unions where the main source of income is member loans.

Chill Money’s loans will only be available online. Applicants will have to upload documents to verify their personal details. These include a utility bill, a driver’s licence, and bank statements.

Applicants will have their credit record checked on the Irish Credit Bureau database.

General manager of Chill Money Fergal Lynch said the move will spark life into the personal finance market in this country.

“We believe Chill Money will shake up the personal finance sector in Ireland as we once again champion user experience, accessibility and speed.”

He said consumer confidence is on the rise so people want to borrow again to fund purchases such as cars, home improvements or special events, like weddings.

“There will be a strong demand for Chill Money as people move away from long queues and lengthy applications by phone or in person. Our commitment to customers is that we will be nothing like a bank,” Mr Lynch said.

It is expected that Chill Money will create up to 50 jobs over the next 12 months.

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