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Coop Pank started offering a loan at 1% interest to help with the payment of electricity bills

Domestic bank Coop Pank has begun offering its customers a utility loan with an annual interest rate of 1%, which aims to provide an opportunity to defer payment of high heating and electricity bills to a period of up to six months.

Existing and new clients of Coop Pank can apply for a loan product aptly called Energy Loan (Energialaen) to facilitate the payment of utility bills – for 300-1000 euros per client for up to 6 months. The annual interest rate is 1%, and the contract fee is 10 euros.

This is an unsecured loan product with the lowest interest rate on the market. For instance, a 700-euro loan for 6 months will have to be repaid in the amount of 702.04 euros, and there are no hidden additional costs.

According to Rasmus Heinla, Head of Private Banking at Coop Pank, the purpose of the Energy Loan is to offer customers the opportunity to mitigate high energy costs, especially due to the sharp increase in electricity and heat prices, to pay off accumulated liabilities, and to cope more effectively with high utility bills over a longer period.

“This product will not replace or compete with government support measures. We ask all clients to consider that this is not a form of financial assistance, but rather a loan product with a fixed term financial obligation. Clients who receive support from the state or local government have the opportunity to repay the loan faster without additional costs,” Heinla explained.

Heinla added that while offering Energy Loans, Coop Pank follows the responsible lending principles, as it does with all other similar loan products: “The applicant's ability to repay the loan, his or her income, current liabilities and history of payment discipline are all assessed. This is a loan product designed to facilitate utility payments for Coop Pank customers. They cannot replace other obligations before Coop Pank.”

The Energy Loan can be applied for by all current and new clients of Coop Pank who have a current account with Coop Pank and during the loan period pay their utility bills using such a current account. A Coop Pank current account can be opened on the Coop Pank website or at a bank branch.

To apply for an Energy Loan, go to the Coop Pank website and fill out the respective form. You can also apply for a loan in any of the 15 branches of Coop Pank all over Estonia. A single Coop Pank customer can apply for one Energy Loan.

Estonian-owned Coop Pank is one of the five universal banks operating in Estonia. The number of clients using Coop Pank for their daily banking is 112,400. Coop Pank aims to put the synergy generated by the interaction of retail business and banking to good use and to bring everyday banking services closer to people’s homes. The strategic shareholder of the bank is the domestic retail chain Coop Eesti comprising 330 stores.