Interest rebate on the way as Credit Union ends 'satisfactory' year

Next week's agm of Mullingar Credit Union is going to bring some good news to customers: a return of the interest rebate which refunds to customers 5 per cent of the interest they have paid on loans over the past year.The rebate will come on top of the dividend rate, which is remaining at the same level as last year, at 1.75 per cent.The impact of the financial crisis has caused significant changes to the books of the Credit Union over the last year, with loans outstanding to members reduced by over €10 million, and savings by members up by €4m."Members are paying off loans and refraining from taking on new borrowings, choosing to defer expenditure or draw down their savings in preference," a statement from the Credit Union said this week.The institution has admitted that it is satisfied with its performance over the past year, given the general economic conditions prevailing. The agm will hear that the Credit Union's surplus for the year is over €6 million - up from €3.8 million last year, and total reserves have increased by over €3m.In addition, investments held by the Credit Union increased during the year by over €9 million and stood at over €107 million at the end of September. Membership also continued to increase.However, on the negative side, "in common with all lending institutions (we) have seen increases in loan arrears as members suffer from the effects of the economic recession", the statement continues. In recognition of the increases in loan arrears, the body has "substantially" increased the levels of provision for loan defaulters."We strive to be as understanding and as accommodating as possible to members who find themselves in difficulty with meeting loan repayments: however, we have a duty to all our members to pursue loan repayments to the fullst exxtent possible". The Credit Union is advising its members to avoid excessive credit card debt, and other expensive forms of credit such as moneylenders, hire purchase agreements, and bank overdrafts etc. "Many people are still unaware that the interest rate charged by licensed moneylenders, shops etc. providing door-to-door and in-store credit can legally be as high as 188 per cent; many well-known shops and businesses charge interest rates of between 21 and 35 per cent."