And a survey of a selection of the lending rates at other credit unions shows they charge interest as low as 3pc.

St Raphael’s Garda Credit Union is reducing its personal loan lending rates for its members by up to 0.5 percentage points.

The new lending costs are thought to be the lowest interest rates in the country. The cuts take effect from April 10.

St Raphael’s said nine out of 10 of its personal loan members will benefit from the cut of up to 0.5 percentage points on its personal loan interest rates.

The new rates will apply to new and existing members.

Home-improvement loan rates are going down by 0.5 percentage points to 4.25pc (this is an annual percentage rate of 4.34pc).

Car loan rates are falling by the same percentage to 4.95pc (APR 5.07pc).

For green loans, there is a cut of 0.35 percentage points to 4.15pc (APR 4.24pc). What the credit union calls everyday loans will see a cut of 0.4pc to 7.85pc (APR 8.16pc).

St Raphael’s Garda Credit Union has more than 40,000 members and over €580m in assets, which means it is one of the largest in the State.

Chief executive of the credit union, Claire Byrne said: “We’re cutting our personal lending rates because we’re a member-owned organisation and we want to provide the best deal possible for our members.”

She said the St Raphael’s personal lending rates are already lower than the banks and the cuts will put it even further ahead of them.

“We offer the same rates for new and existing members because it’s important to us that we treat everyone fairly.”

The Irish League of Credit Unions, a representative body for the sector, said the locally owned lenders lead the way in the personal loan market, offering some of the most competitive loan rates on the market.

The majority of credit unions offer lower rates, depending on the purpose of the loan. Each credit union sets its interest rates at local level, the league said.

Cana Credit Union, the lender for the staff of the Revenue ­Commissioners, has a personal loan rate at 5.9pc.

Credit unions Tara and District, in Co Meath, and North Midlands, in Mullingar, Co Westmeath, both have personal loan rates of 7.9pc.

One of the lowest rates for car loans is from the other garda credit union, St Paul’s, at 4.9pc.

When it comes to education loans, Nenagh Credit Union in Tipperary has a rate of 3pc, with Galway’s ­Athenry offering education loans of 5.4pc.

The league said loans issued by credit unions are funded by the members’ savings. Rates are not linked to the European Central Bank, which means credit unions do not increase loan interest rates when the ECB rates rise.

There are no penalties or fees for early repayment of a credit union loan. You can pay off your loan early, make additional lump-sum repayments or increase your regular repayments, all without penalty.

Credit unions provide free loan protection cover to eligible members.

Should a member with an outstanding loan balance die, the balance is repaid in full, subject to terms and conditions and certain cover limits which apply. This benefit is not offered by any other financial institution, the league said.