Credit Unions: Official MoneySavingExpert.com Discussion

brightonman123

my understanding of c/u's were that you had to
save for x amount of months first, before being allowed to apply for a loan, which would be limited/based on the amount you were saving..

no ridiculous interest charged, or paid out. perhaps some/all the banks should take note!

ahai1

Does the common bond apply to all products as some credit unions offers ISA's and mortgages?

Burny_Sweetwater_Glasgow

Brightonman123 - each credit union is autonomous and has its own lending policies. Some require you to save for a set period, then you can apply for a loan, some will base that loan on the level of your savings and some will base it on your ability to repay. Some will offer instant loans which probably have a set limit maybe 2,3 or 5 hundred pounds and will probably charge the higher interest rate of 26.7%.

ahai1 - short answer is yes. However it is becoming more common that there could be more than one credit union that you can join as common bonds are being expanded all the time. In my area it could be a possibility that you have a choice of up to 7 credit unions you could pick from and be a member of more than one of them. 2 offer mortgages and I think Isa accounts so here you could take your pick.

In each case I would suggest you check all local credit unions to see what areas they cover and what products, loan policies they offer.

ahai1

Sadly even thouh I live in London the common bond for most of them are either borough of employment or residence or education so the maximum you can join is 3.

Getting back to volunteers that is part of the problem. I had a talk with a supervisor once about a volunteer and he basically told me they can do anything they like which was not much and the behaviour was not very professional.

Volunteers when they do a good job are wonderful but they are used as a cheaper alternative to full time staff and they can leave when they want to. Also the problem with them is that some of them don't know what they are doing and just want to be part of something. I know this from experience. I would perfer a core of full time staff. I am not intending to offend anyone but I thought that I would warn people of the dangers of volunteering. I was talking to people once who got roped into been trustees of a local charity and they left soon enough and it closed.

Burny_Sweetwater_Glasgow

I dare say that your credit union would like to have a core of paid staff along with many other credit unions but until they generate sufficient income through loan interest how can they finance this? That requires growth in membership, growth in loans maybe havving to charge the highest interest allowed under credit union legislation. And don't forget they will have to consider the possibility of paying a dividend to attract savers, such as yourself. They could try and get funding to cover staff costs but in todays climate that is becoming increasingly difficult and what happens when the funding ceases? Credit unions do not want to be reliant upon funding if at all possible and if they do go for funding it should be for a period long enough to see them become self sustaining and have a clear exit strategy. Problem is trying to access funding that will allow this. Even when a credit union reaches self sustainability the boards have to consist of volunteers by law as do other committees. Although the FSA have stated that credit unions should improve the professional quality of their board members it is very hard to recruit people who possess professional skills and knowledge who are wiling to give their time for no renumeration except maybe if they are lucky travel expenses. Volunteers are worth their weight in gold and in credit unions are not, I believe, used as cheap labour. Anyone who offers to help others for no reward in what ever capacity within any organisation should be praised for their efforts. Too many people in todays society are more concerned with their own comforts than the plight of others who are not so fortunate. If all the volunteers in this country decided to withdraw their help the country would soon realise just how large a contribution they make to the smooth running of many organisations. If many businesses/organisations were suddenly faced with paying volunteers for their services and the hours they put in there would be a huge increase in the numbers of businesses/organisations closing their doors. Volunteers are hugely undervalued by those in power today and they don't get the credit that they justly deserve.

ahai1

I agree that people should be praised but increasingly what happens is that the volunteers and the organisation don't benefit because they are the wrong kind of volunteers or have been given the wrong kind of post to use their skills.

I have seen volunteers doing nothing because no one has thought what they can do.

I agree it is the chicken and egg suitation as there is not enough money to hire a large enough group of professional staff.

Joyful

I agree that there is a place for Credit Unions. I used mine as a way of saving without having easy access to remove my money! As it was only open 3 days a week when I was at work and you had to give a few days notice to withdraw a large amount it was much easier to save. The only problem was when I needed to pay my holiday it was very problematic withdrawing my money timewise. It may have moved on from there though as this was 4 years ago.

ahai1

Mine is open 5 days a week but I don't go in as I do all my banking online. I like you use the CU as a savings account by putting in £10 a month via standing order.

ahai1

Here is an interesting article http://news.bbc.co.uk/1/hi/uk_politics/7794334.stm It could be a good thing as it brings in more money.

4littleone

Hi,

I am a member of a credit union after reading about them on here and doing some research of my own on the net etc.

My story is that i am classed as a high earner and middle class. I have never over borrowed or intentionally defaulted on credit.

I was however made redundant a couple of yrs ago and my final pay was not received for almost 7 months as the company had gone under. At the time i had a relatively small amount of credit, that was a loan from Black Horse which had about 2500 left on it.
I also had a small ish overdraft of 370.
I couldn't make the payments on either of those, i had zero income and a child to support with no maintenence and a wait of nearly three months to get any benefits.
I ended up with 3 ccjs in the end. I went to court for each one and offered token payments (as i had been paying all along) until i returned to work. I showed proof i was actively seeking work and that i had been paying £1 a month to each creditor and communicating with them.
In each case the magistrate granted the CCJ.

I got another very well paid job soon after and began making higher monthly payments to all three creditors. I was doing all the right things to rebuild my credit record such as being on the electoral roll etc etc.

However, the three CCJs meant that it was very difficult to even get a landline installed in my home, a mortgage would never happen and privately renting was extremely difficult without a guarantor and paying 3 months rent in advance etc etc.

I joined my local credit union and began to save a small amount on a monthly basis. I applied for a loan after a few months to pay off my CCJs. In total i had to borrow £5200 to pay off everything completely. When i applied i was credit checked but because i had been open about my credit history and because i have a large amount of disposable income left each month after paying all bills i was accepted.

All my CCJs are now marked as satisfied and i finally feel i can move on with my life. My credit score is now much better and i don't feel so self concsious about my financial situation.

Credit unions aren't just for lower incomes, they are brilliant for people like me who had pretty awful luck and are consequently completely frozen out of the market place for affordable credit even though i could more than afford repayments.