The state’s credit unions say they are approving loans for hundreds of people who need to borrow money to pay their heating bills this winter.
“It’s in the hundreds and the heating season hasn’t really even started yet,” said Jon Paradise, a spokesman for the Maine Credit Union League. “It’s going to get worse.”
Paradise said at least two-thirds of his member credit unions are offering energy assistance loans that carry interest rates of anywhere between 0 percent to 8.9 percent, with the average at just under 5 percent. Most of the loans are to be paid back over a year. The majority of the loans have a cap of $5,000.
He said while a handful of the people applying are getting low-income energy assistance in addition to the loan, most are not.
“These are hard-working people, lower-to-middle income,” he said, who just can’t come up with the money needed to pay their oil bills.
The average statewide price of home heating oil is $3.82 this week, falling 16 cents since the last survey was taken by the state’s energy office two weeks ago. The drop is tied to the drop in the price of crude oil, which went below $100 a barrel this week for the first time since March. Whether that decline will continue is anybody’s guess.
Paradise said the way the loans work is the credit unions make the check directly out to the oil dealer.
Asked how people would pay their loans back if they don’t have the money to pay their heating bills, Paradise said for many it’s a timing issue.
“What it does is it buys them time,” he said, and allows people to cover the costs of their heating bills over the course of the year rather than in one season.
The Maine Credit Union League represents 67 credit unions in the state, serving 600,000 consumers, Paradise said.