Credit unions discussion

Former_MSE_Wendy · 4 June 2008 at 2:41PM

This thread is for discussion of credit unions, as mentioned in the Cheap Loans article. Also, see the Credit Unions guide.

Click reply to ask a question or discuss.

quidsinquentin · 29 June 2008 at 8:21AM

Wow....this is a PACKED article!

So there's really no-one on MSE who's a member of a CU???

FROSTYFRECKLE · 29 June 2008 at 9:30AM

I am a member of Scotwest Credit Union, so is my hubby. We both have savings with them, current accounts (still waiting for the new joint current accounts to come online), and hubby has small flexiloan. We would not go back to any high street bank again. Hubby has neurological condition and Scotwest takes this into account, so will only communicate with him as arranged. Woolwich/Barclays were not so considerate.

UKroseblue · 29 June 2008 at 10:30AM

I am also a member of our local credit union. I save regulalry but not much and have had 2 small ish loans over the past 2 years. There are no credit checks with my credit union, only a form to complete outlining your income and outgoings so that they can see that you can afford to repay the loan. You can have the loan for almost anything and the cheque arrives a couple of days after the loan is agreed. It's really a great service and the people that work there are very friendly. They also run a Christmas Club which helps spread the cost and they also pay a small dividend to members each year. They really want to encourage local people to use the credit union and i have told a couple of my friends about it and they too have had small loans after saving for a few months. As long as you repay any loan and continue to save they will usually help you out without asking too many questions.

FROSTYFRECKLE · 30 June 2008 at 11:20AM

Does anyone have more info on the new regulations for Credit Unions. Just read on Ceefax new regs are going to brought in?

Rebob · 30 June 2008 at 11:17PM

I have been a member of my local credit union for about 5 years. I have had numerous loans. The first loan could be twice your savings, second loan three times savings and once you have shown to be reliable for repaying it there are less restrictions. One thing is that the loan is insured in case I die so it would be automatically repaid in full. They do a christmas voucher savings club where you get £100 of vouchers for £95 savings! Loans are quick and easy and can be paid in cash. Would recommend them to most people as you are a person with your own situation which is better than being lumped in with others!

duputydugg · 17 July 2008 at 1:27PM

Hi, not only am a member of a Credit Union, I'm a director of the Credit Union too, https://www.nbccu.org.uk to be precise.

Credit Unions are by far the cheapest legal organisations providing savings and loans to people otherwise excluded from the normal banks. It is shocking to hear that someone on a low income will be refused a bank account, as it costs the bank approx. £100 each year just to process it, with prospect of a profit for the bank. They don't see this as part of their Corporate Social Responsibility.

Credit Unions are developing fast, but services can still limited as many are run by volunteers, such as myself.

However for a loan of less than £2000 repaid over a year, Credit Unions are by far the cheapest option.

The change to the Credit Union rules will encourage more people to join a CU, particularly Housing Associations tenants and by setting up Save as You Earn schemes via employers.

Skint_Lynne · 19 July 2008 at 1:42PM

Hi,

I have been a member of my local credit union for about 8 years and it is wonderful. I've had quite a few loans from it, they ask what your outgoings are to make sure you can pay the loan back without any hardship. I have written out my own personal get rid of debt plan and the credit union will help me to achieve this. I have worked out that is it a lot cheaper for me to pay off a credit card with a lump sum from the credit union than to pay it off bit by bit myself. I reckon that I will be debt free in about 5 years by working this way, (I have personal and business debts). I will also be giving the interest to the credit union and not faceless banks. Some CU's offer mortgages, mine does not at the moment but I will switch to them as soon as it does. I would urge anyone to join up if you need a loan, you are helping your community by keeping the credit union alive.
SL

baby_boomer · 19 July 2008 at 1:49PM

UKroseblue wrote: »

There are no credit checks with my credit union.....they will usually help you out without asking too many questions.

Which is why a few have a habit of getting into difficulties.

They also run a Christmas Club which helps spread the cost and they also pay a small dividend to members each year.

Try Skipton BS Christmas Saver @ 6.8% instead.

I can't see the business model working in today's tighter environment. Money will be more scarce with their small savers and loan defaults are bound to go up as fuel & food inflation hit the lower earners disproportionately.

Credit Unions are good if you want a loan - but not good if you want a proper savings rate to maintain your assets as inflation hits 4%.

Skint_Lynne · 19 July 2008 at 2:44PM

Some people are not accepted by banks or building societies if they are on low incomes, and with some savings accounts you have to commit to saving a certain amount annually to keep the account open, so this is not an option for everyone. Credit unions may not work for all, but it works for me. I understand that they may leave themselves vunerable because they don't credit check, but I would feel bad if If did not pay, because they are funded by the people in the community, therefore the cash belongs to everyone. (It would be like stealing your neighbours purse or something similar). It does work both ways though, I am lucky that the one in my area is very well organised. They have an AGM and go through the accounts and you can ask questions about the cashflow etc.

FROSTYFRECKLE · 19 July 2008 at 6:16PM

Hi,

I forgot to mention my Credit Union does credit checks. It also has insurance against fraud and must register it's accounts the same as Banks and Building Societies. All savings up to £35,000 are protected the same way as banks and building societies. Yes, we do not make a massive return on our savings but it is enough for us - currently 4.5% for our account. We are members as we like to be treated as a person and not a number.

We would be wary of a Credit Union not credit checking people as it shows it does not comply with the FSA rules - so your savings are not protected. Also probably does not have insurance against fraud by it's own officers.

So :T :T :T to Scotwest Credit Union.

PS last year we voted to open the credit union up to anyone living or working within Strathclyde Region.

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