Earlier-than-expected cold temperatures and wildly fluctuating fuel costs can make it challenging for consumers to budget for their winter utility bills. Some credit unions, particularly those in the Northeast, offer special loans to help members cover energy costs.
A survey by the Maine Credit Union League found that nearly 75% of the state's credit unions offer special low- or no-interest energy loans, CUNA's News Now reports.
"It's great to see Maine credit unions again putting the philosophy of 'people helping people' to work for Maine consumers," says league President John Murphy. "The ability to help them cover their heating costs with special loans at low interest rates or, in some cases a rate of 0%, will make a big difference on many people's budgets."
As of early November, more than $5 million had been committed or set aside by Maine credit unions to fund these special loans, which have an average interest rate of 3.99%.
Fuel loans typically are paid directly to the fuel provider or for the reimbursement of members' utility bills. Casco Federal Credit Union in Gorham, Maine, offers loans for heating fuel, firewood, or wood pellets in bulk or to install a wood, gas, or pellet stove.
Because fuel companies don't typically take credit cards, consumers must be ready with check or cash in hand when deliveries are made, says Cathy Harrington, chief lending officer for Quincy (Mass.) Credit Union.
The line of credit provides peace of mind to members. "They're not in a panic when their fuel is running low and they have to fill their tank," she says.
See-sawing fuel costs can decimate budgets, which increases the importance of credit availability. Quincy Credit Union offers a $2,000 line of credit with a 5% interest rate that is open between Oct. 15 and April 15. During the other six months, members make automatic repayments.
"People were calling at the first of the month" about the program, Harrington says. "People use it every winter, and it's good because the payback is automatic."