MoneyLender Vs the CUs

What is a MoneyLender?

A Moneylender or Payday Lender as they’re sometimes known, provides quick cash to act as a short-term loan – most collect the loan repayments weekly in cash. Their official title is High-Cost Credit Providers because they provide HIGH-COST CREDIT Loans. They typically lend small amounts of cash over a short period of time with a high interest rate, and you’ve guessed it! That means the repayments are extremely high – much higher than with a CU or bank.

This short-term solution can have a long-term negative effect on your overall credit rating making it much harder to take out a mortgage or even do something as simple as signing up for a mobile phone contract! Moneylenders should be registered with the Central Bank of Ireland or Financial Conduct Authority. However, some are unregistered ‘Loan Sharks’ who offer fast cash at super high interest rates taking advantage of those who’re struggling financially.

What’s the downside to using a Moneylender?

    • It’s called High-Cost Credit for a reason! Moneylenders can charge up to 10 times the interest for a CU or bank. In fact, licensed Moneylenders cannot charge interest rates over 48% per year but this in itself is shocking if you compare it to a Life CU loan where you can borrow anything from €500 to €100,000 from as low as 6.17% APR. For example, the interest on a €1,000 loan with Life CU is just €49.16 compared to a whopping €534 with a Moneylender Loan! (Rate varies depending on loan amount from 6.17 – 9.93% APR, T&Cs Apply). Those are some shocking stats!
    • Legal action is more likely to be taken by a Moneylender if you can’t pay back your loan in time or repeatedly miss repayments during the term of the loan. The lender can get permission to start legal action immediately, without having to wait 21 days.
    • They perform little to no credit checks so you’re at risk of borrowing much more than you can afford to pay back. This could send you into a cycle of debt with the crazy high-interest rates just compounding the issue. In fact, Moneylenders are not allowed to offer top-up loans or another loan to pay back a previous loan as this can send you further into debt. But if you go with an unregulated one, you may be putting yourself at risk of some seriously intimidating behaviour if you can’t pay the loan back quickly enough!
    • Even if you pay back your loan in a timely manner, the fact you even had to take out a Moneylender or Payday loan in the first place could damage your credit rating. Many mortgage providers may look less favourably at these types of loans as it can give the impression of not being able to budget efficiently.
    • As previously mentioned, there are many unregulated Loan Sharks out there who do not follow the rules set out by the Central Bank. Please be very careful and check out any lender that you plan to use so that you fully understand the rates and terms and conditions from the outset.

As a Credit Union we pride ourselves on offering fair lending interest rates and terms and conditions. We will only lend what you can afford to repay, and if you get into difficulty, we will work with you to work out a payment plan that suits both parties. Try our handy loan calculator to see what you can afford to borrow.

Life CU is regulated by the Central Bank of Ireland. Loan example is for illustrative purposes only. Actual repayments will be calculated in the Credit Agreement. Typical money lender loan example from, correct at 26/10/2022. Life CU loan example actual repayment amount will be given at time of borrowing. €1,000 Personal Loan over 1 years. €20.18 per week. APR 9.93%. Cost of Credit €49.16. Total Amount Payable €1,049.16. *APR stands for Annual Percentage Rate. Lending criteria, terms and conditions apply. Over 18s only.

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