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Smarter borrowers in Gwynedd have learned to steer clear of payday loans and the high street lenders that push predatory loan products. While banks might be able to meet their borrowing needs at a certain price, many locals have found that the lone credit union based in Caernarfon might provide the best option.

North Wales Credit Union Ltd is a charity that provides financial products and services similar to those offered by for-profit banks. The difference is that this cooperative reinvests 100 per cent of profits back into the credit union. This benefits all members by keeping rates as low as possible. It also allows managers to be less restrictive on loan underwriting, so that some applicants with less than perfect credit may still be approved.

A branch office is located on Pool Street in Caernarfon. As an open membership organisation, North Wales Credit Union allows anyone who lives or works in Gwynedd to join. Enquiries may be directed to 01286 678686, where hours of operation can be confirmed.

Where the credit union really stands out is the low interest rate options they offer. In a time where payday loan rates of nearly 2,000% APR are commonplace, North Wales Credit Union offers a personal loan with an interest rate starting at just 5.9% APR. Available loan packages can range from £7,500 to £15,000.

Not every applicant will be approved for a loan, and it is possible that a higher interest rate may be charged to some borrowers. Credit blemishes or lower household income could reduce the approved limits for some applicants.

There are some ways that an applicant can boost their approval chances.

• Become a member of the credit union prior to needing a loan.
• Regularly add to savings to increase shares balance.
• Be able to document a consistent earnings record.
• Successfully repay a smaller loan to show that they can be trusted to repay a larger loan.

The proceeds issued to the customer can be used for just about anything. Some members use loans to cover a financial emergency. Others pay rent or utility costs when earnings are low, such as during a job transition or when struggling through a slow period of a zero hours contract.

Whatever the need, all Gwynedd residents as well as those who work within the county may become members. Members have access to loan products, providing a cheaper alternative to expensive loans when an emergency situation arises.