The Personal Microcredit Scheme provides small credit union loans at low interest rates. The loans are available to people getting a social welfare payment who may have difficulty getting credit from other sources. The scheme aims to reduce dependence on moneylenders with very high interest rates. The loans are called It Makes Sense loans and the scheme is being rolled out nationwide.
You can get a list of participating credit unions on the It Makes Sense Loan website.
You must be getting a social welfare payment to qualify for an It Makes Sense loan. You can apply to borrow between €100 and €2,000 and a maximum interest rate of 12% (12.68% APR) will apply.
If you are not a member of your local credit union you can join very quickly (provided that you live in the local area) and be considered immediately for an It Makes Sense loan. Loans can be granted quickly – in some cases within 24 hours – but usually within a working week.
It Makes Sense loans are available to people aged over 18 who are:
- Getting a social welfare paymentand
- Agree to repay the loan through the Household Budget Scheme or by standing order or direct debit if your social welfare payment is paid into a bank or credit union account
You can apply for a loan for any purpose, including repayment of an outstanding debt. You can take out a loan for a minimum period of one month up to a maximum of 2 years.
The scheme rules may differ between credit unions. For example, some credit unions may offer loans at lower amounts or ask a member to save for a certain amount of time before applying for a loan. Contact your local credit union for details. See ‘Where to apply’ below.
The decision to grant a loan and the amount of the loan, remains entirely with the credit union. You do not have an automatic entitlement to a loan.
The minimum loan amount is €100 and the maximum amount you can borrow is €2,000.
You must repay your loan each week from your social welfare payment through the Household Budget Scheme or by direct debit or standing order from your bank or credit union account. The maximum deduction allowed under the Household Budget Scheme is 25% of your weekly social welfare payment. This includes any other deductions that you may already have under the Household Budget Scheme (for example, for rent or for household bills).
The maximum interest rate that credit unions will charge for an It Makes Sense loan is 1% a month or 12% a year (12.68% APR).
|For a €500 loan||APR||Term||Weekly repayments||Interest charged||Total repaid|
|Credit UnionThe It Makes Sense loan||12.68% (variable)||6 months||€19.84||€15.84||€515.84|
How to apply
You apply for an It Makes Sense loan through your local credit union.
Joining the credit union
If you are not already a member of the credit union you will need to provide:
- Proof of your identity – for example, a current passport or driving licence
- Proof of your address – for example, a recent household bill or a recent Government-issued document such as a letter from the Department of Employment Affairs and Social Protection, and
- Your PPS number
Applying for an It Makes Sense loan
You need to bring 2 consecutive social welfare slips (from within the previous 4 weeks) if you collect your weekly payment at the post office, or 2 months bank/credit union statements if you receive your social welfare payment into a bank or credit union account, to your credit union.
Your local credit union will help you fill out a loan application form and complete the form to allow deductions from the Household Budget Scheme.
Where to apply
The loan is available at credit unions throughout the country and the number of credit unions participating is increasing as more credit unions join the scheme. The It Makes Sense Loan website has a list of participating credit unions.
You can get information and advice about budgeting from the network of Money Advice and Budgeting Services (MABS):
Westend Commercial Village
Tel: 0818 07 2020