Personal loans

Credit unions tended to have lower interest rates on both secured and unsecured loans (see Rates and fees). Some credit unions charged no set-up fee for personal loans – and when they did, it was often considerably lower than the banks.

But credit unions usually have conditions on personal loans that banks don't. For example, you may have to be a member of the credit union for 12 months before getting a loan. Their interest rates may also depend on the customer's credit history and income – so you may not always get the lowest rate offered by the credit union. Also, while there may not always be fees to pay for establishing a loan, there are joining fees for becoming a credit union member.

Aotearoa Credit Union director Darryl Evans, who’s also chief executive of Mangere Budgeting Services, told us: "credit unions will deal with families that have been turned away from the ‘high street’ banks, giving them access to long-term low-interest loans. They’ll still consider people with bad debt on a case-by-case basis."

Mortgages

Credit unions can offer mortgages, although there are often restrictions on the amount that can be lent.

The bigger the credit union, the bigger the (potential) mortgage loan … and the smaller it is, the smaller the loan. Two examples: the maximum mortgage loan from Manchester Unity Credit Union is $300,000; United Credit Union’s is 80 percent of $350,000.

Four credit unions offered floating-rate mortgages only – First Credit Union, NZCU Auckland, Wellington District Manchester Unity Credit Union and United Credit Union – and their rates on the whole were slightly higher than those of the banks.

For two-year fixed rates, credit unions tended to be lower. ANZ and National Bank were the highest (6.49 percent); the lowest was Manchester Unity Napier at 5.95 percent.

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