Credit Union Loans Interest Rate

CU Loans Rates

All Credit Union loans are loaned at the rate of 12% regardless of the nature of the loan – thus a shareholder pays 1% per month on their loans.  This 1% is paid on the reducing balance thus the Actual Percent Rate (APR) on a loan is not 12% but rather is generally between 7.5% - 8.5%.  Loans offered from a Credit Union are more flexible than a bank and Credit Unions even offer the option to reduce payments to suit the individual shareholder’s budget. 
The only time that the rate of interest for a loan offered from the Credit Union may be different from the aforementioned rate is if monies secured by the Credit Union, was given at a particular rate.   In this case the Credit Union must ensure that they are able to meet the payment to the loaning agency.  For example, if the monies secured were given to the Credit Union at 11% then the CUunion may choose to loan monies from these funds at 13% to cover the costs associated with these loans.
Below is an example showing how the APR is calculated on a loan that has been completely paid off.