Charlie Weston: Credit unions have some of the best deals out there
'Banks are back offering consumers personal loans again, but don't forget that credit unions have some of the best deals out there and lots of money to lend'
BANKS are back promoting personal loans. Having ignored this segment of their business during the austerity years, they are now cutting loan rates as they try to lure in loan customers.
You will notice a lot of advertising by banks for personal loans at the moment.
All of this coincides with a rise in consumer confidence as many people are starting to get to grips with their debts, after years of scrimping and paying down borrowings.
None of this bodes well for credit unions, which have €5bn available to lend to households, and often have more competitive rates.
Ulster Bank is the latest to cut its personal loan rates.
The lower Ulster Bank loan rates apply on all fixed rate personal loans over €4,500 and up to €40,000.
The new reduced standard rates will start from 10.9pc for between €4,500 and €7,999 and go to 7.9pc for loans between €12,000 and €40,000.
Customers who hold a Ufirst, Ufirst Gold or Ufirst Private account can get lower rates.
KBC Bank is offering a 2pc discount on loans to customers who make their loan repayments by direct debit through a KBC current account.
Most of the best rates are for home improvement loans. KBC was one of the first movers in this space, and offers a (fixed-only) discounted rate of 8.9pc APR (annual percentage rate) for such loans up to €20,000, falling to 8.5pc APR for loans over this amount.
Permanent TSB has since bettered that with a 8.2pc APR for its own home improvement loan - the loan amount must be at least €10,000 but can go right up to €75,000.
Bank of Ireland has upped its game recently by offering a general-purpose personal loan at the market-leading rate of 7.5pc APR for loans ranging from €300 up to €65,000.
You can view some personal loan rates through the financial product comparisons section of the CCPC website Consumerhelp.ie, but bear in mind that it only compares standard loans and not those offered for particular purposes, such as home improvement.
A new innovation is cash-secured loans.
These are similar to loans from a credit union in that you have to use your savings for security for the borrowing.
Permanent TSB is pushing this.
So you can get a loan of say, €10,000 at a rate of 6.4pc APR as long as you have €10,000 in a Permanent TSB savings account - a discount of over 6pc on its standard rate for a loan of this size.
If you are inclined to stay loyal to your current bank, do check out how much of a discount you might be entitled to over standard rates. Ulster Bank and KBC Bank both offer discounts to their current account customers.
Meanwhile, a new State-supported lending scheme to take on moneylenders has been launched - in time for cash-strapped families to borrow for Christmas.
But the new It Makes Sense loans only apply to those on social welfare.
Some 32 credit unions are participating in the initial pilot phase of the new scheme. The list includes credit unions from all over the country, large and small.
The scheme also involves post offices and is backed by St Vincent de Paul. Families are now able to get hassle-free loans of up to €2,000, with most expected to borrow €500, at a fraction of the cost charged by moneylenders.
It is expected that there will be a one-day turnaround in loan applications.
The aim is to take on moneylenders. It is estimated that there could be as many as 400,000 people borrowing from them. Licensed moneylenders are allowed to change up to 188pc, with allegations recently that some were illegally topping up people's loans before they had finished paying off initial moneylender borrowings.
Those who take the loan must agree to have repayments made from their social welfare payments under An Post's household budget scheme.