Leeds Credit Union estimates its members saved £3.13m in high interest payments in the run-up to Christmas.
Its figures – based on a high interest lender APR of 1,200% – follow a pre-Christmas campaign by by the credit union, informing locals of its low interest loan. The credit union welcomed 1,140 new members and issued 2,309 loans over this campaign period.
Leeds Credit Union charges a 42.6% APR for a £500 loan with monthly payments of £50.24 over the course of 12 months. By contrast, a door step lender could charge an APR of 300% with monthly payments of £81.64 while a high interest lender would charge an APR of 1,200% with monthly payments of £129.08. Thus a £500 loan would cost £602.82 with Leeds Credit Union while a door step lender would charge a total of £979.70 and a high interest lender would ask for £1,549.
A survey conducted among the credit union’s 37,000 members in December last year showed that more than 20% of respondents were reliant on borrowing or credit to pay for Christmas.
Chris Smyth, managing director at Leeds Credit Union, said: “LCU was determined to ensure those struggling to cope financially this Christmas didn’t turn to unethical payday, doorstep or loan shark lenders, and we are delighted to have helped keep £3.13m in the pockets of those that need it most across the region.
“Undeniably, we are living in a time of never before seen uncertainty, with many finding themselves in unexpected financial difficulties. It has never been more important that as a credit union, we step up and ensure as many people as possible across the region have access to affordable and ethical borrowing, and that they are kept away from those looking to take advantage of the situation.”
Leeds Credit Union was named as the region’s best lender at the Yorkshire Finance Awards in 2020.