Avoiding Expensive Loans and Affordable Credit

We provide affordable credit to our Members who need to borrow. Affordable credit is a responsible approach to lending - we won't give a loan to a Member if it will cause them financial hardship.

Most people can get credit somewhere - but a lot of people end up going to high-cost lenders. These are companies who seek to make as much money as possible from the loans they provide, with fewer safeguards for the wellbeing of borrowers, no real consideration of the affordability of the loan and often far more aggressive forms of debt management. Sadly (and illegally) there are also loan sharks, who are unregulated and tend to prey on the most vulnerable members of our society.

High-Cost Lending

High-cost lending is legal, and the majority of those firms are regulated. At the time of writing this, in June 2023, our research shows several of these lenders charging around 1,300% APR! This is perfectly legal. We believe it is completely immoral and a really expensive way to borrow money. Almost every person who is able to borrow at these ridiculous interest rates, could borrow from a credit union, like KCB.

KCB's average interest rate on loans during 2021/22 was under 21% APR.

In our experience, people tell us that they are attracted to high-cost lenders for three main reasons:
• attractive TV and social media adverts;
• money paid into their account within a few hours;
• they don't think anybody else will lend to them.

Those fancy adverts cost hundreds of thousands and they aim to recoup that money very quickly, from those who can least afford it. Those firms just want to make as much money from interest and charges as possible, often charging extra money on top just to pay the money into your account within a few hours. KCB wants all of our Members to save, budget and borrow only when they need to, and at affordable rates. We are much more sympathetic and supportive should you have problems repaying loans and will work with Members to help them.

Surprisingly, most people don't know that KCB can process a loan application and pay money into your account in under 2 working days' (some of our loans are paid out same day). We never charge money to pay money into your account same day either - we have no hidden fees or charges.

Crucially, we will lend to people with poor credit if the loan will be affordable. We encourage people living or working in Fife to join today and not wait until they really need to borrow money. Join today, save what you can and then access low-cost, quick, affordable loans when you need to.

Loan Sharks

Offers of instant cash to pay bills can seem attractive, but research shows that many of those loans can take years to pay back, the interest payable is many times more than the amount borrowed and financial problems worsen rather than improve, often resulting in stress and other health issues.

Some of these lenders are known as loan sharks - these are illegal money lenders who target vulnerable people, charge horrific interest rates and can often be very threatening and intimidating when collecting payments. You are not in trouble if you have borrowed cash or have been paying back a loan from an illegal money lender - they are the one committing a crime, not you. You should report any illegal money lenders to stop them preying on more vulnerable people in our community by calling the Scottish Illegal Money Lending Unit's confidential helpline on 0800 074 0878 (it's open 24 hours, 7 days per week).