What is a credit union?
Credit unions are ‘not-for-profit’ financial co-operatives which offer convenient savings and low-interest loans to its members. Membership is based on a ‘common bond’ which links members together. There are about 700 credit unions in Great Britain with over 300,000 members and around £200 million in assets.
Why should I join?
You can obtain very low-cost loans of just 1% interest a month (12.68% APR) with no hidden fees or transaction charges. This is great when looking to pay for holidays, a new car, home improvements, Christmas presents, or make repayments on existing debts such as credit cards (larger loans may be repaid over a period up to 36 months). It is also an easy way for people, especially young people, to save.
You can save as often as you like and as much as you like, so even small monthly amounts soon add up (up to legal limits). As a member you may receive ‘cash-back’ in the form of an annual dividend (Amounts vary and we are dependent on the amount of interest the Credit Union earns from loans).
How can I join?
Simply complete one of our application forms and present it, together with identification and a membership fee of £2, at our office. Our page on Membership should provide the information you require.
How do I save?
For your convenience you can pay in person at our office or a local branch (collecting point), or you can pay by standing order (see bank standing order form). Some members pay by payroll deduction where they have been able to persuade their employer to set up a savings scheme at the workplace.
How much do I have to save?
As much or as little as you wish. The maximum value of shares (savings) a member may hold is currently limited by law to £5,000.
When can I withdraw my savings?
Unless you have an outstanding loan you can withdraw your savings at any time. If you currently have a Credit Union Loan this will be secured against any savings, unless the value of the savings exceed the outstanding loan. This is stated on our Loan Agreement form which you are required to sign before the loan is granted.
How am I insured against untimely death?
If you die and have an outstanding loan and are under age 70, the loan will be cleared in full for amounts less than £2,500. Any shares (savings) will be doubled for savings made before age 65 and 25% for savings made after 65 up to the age of 80. This is subject to not having any medical precondition. See section on insurance for a fuller explanation.
How do I get a loan?
Once you have been a member for three months, have a minimum number of shares and you are over 18 years old, you can apply for a loan. The Credit Committee will look at your savings record and your ability to repay when deciding whether or not to grant a loan. Our page on Loans should provide the information you require.
What happens if I get behind with my loan payments?
Initially you will receive a warning letter, because it's possible your bank has not processed a standing order payment, or there is some other explanation as to why your payment has not come through to us. Being a credit union we can be sympathetic if our members have a problem repaying a loan. In that case we ask them to come and see us so that we can find some way to help - for example, repaying the loan over a longer period. However, if you do not respond we will take appropriate action through the courts.
What happens if I fail to repay my loan?
If we have not received payment within a specified period, we will take action through the courts. Remember, a credit union is not bank, but a savings & loans cooperative. Thus your loan will have been provided through members' savings - we have no other source of capital - and the members expect the credit union to take whatever action is necessary to recover their savings.
How safe is my money?
Credit unions are Authorised and Regulated by the Financial Services Authority (FSA). This means that those running credit unions have to be approved by the FSA and comply with certain rules. Credit unions are required to be audited annually and submit a quarterly return to the FSA. The Treasurer and all other people who handle money are bonded so that in the event of dishonesty or robbery, members' money would not be lost. The Supervisory Committee are the 'members' watchdog', verifying records and reporting to the Board of Directors any discrepancies.
All FSA authorised credit unions are participants in the Financial Services Compensating Scheme (FSCS). If a credit union is not able to repay members in full, the FSCS will provide compensation, subject to limits.
What about young savers?
Credit Unions in the UK have many young savers - encouraging them from a young age to get into the saving habit. By being members of the Credit Union, they will have the opportunity to borrow money when they most need it - such as when they go to university, or buy their first car. Members under the age of 18 may not borrow from the Credit Union. A minimum age of 16 is required to be a member, although parents or grandparents may open accounts in a child's name. The maximum they may save is also limited to £5,000. There is no membership fee for young savers. Go to Junior Savers for more information and an application form.
What if I change my mind?
If after you have joined us, you decide that the credit union is not for you, you have 14 days to cancel your membership. The 14 days will start from the receipt of your 'Welcome Letter', which confirms your membership. We would return to you in full all deposits made, including your membership fee, no later than 30 days after the receipt of your cancellation instruction.