Credit Union (merged)

former_student

I heard an advertisment claiming this was NI's best kept secret. What I would like to know is what are the benefits of the credit union? Thanks

OinksAce

Hi,

I actually volunteer for local Credit Union and agree that they are a great product for the Northern Ireland customer and Ireland as a whole in fact.

First of all the Credit Union is owned by the members through shares. ( Each share being £1 )

Loans are generally easiler to get and cheaper than your average bank. This is because there are no start up fees. If you miss a payment there inst a stream of charges coming your way, there will be that additional interest but. Each Credit Union charges there own interest rate depending on there profits for each year. ( Profits are received through loans and investments ) There may also be a interest rebate with some. ( Say 20% of the interest paided that year ). You can also pay your loan as fast as you like paying only the interest during that period. ( No penalty whatsoever )

Savings ( Shares ) on the other hand also receive interest at the end of the year again using profits.

To summerise to need to support your local Credit Union to get the benefits. A small Credit Union wont be great interest rates but as more and more people us it these will continue to rise. ( In theory )

ooo000ooo

Best thing about the credit union is you still have to save (£1 a week) while you are paying back a loan so your savings are always growing. I don't think the interest rates on their loans are that brilliant compared to some deals about at the moment, someone smarter than me worked it out at 12% apr but because you know the people behind the counter are volunteers and it's like being in a wee club it doesn't seem to matter as much. Way cheaper than borrowing money off the local tick man/community representative.

former_student

Thanks for the feedback, I have two questions.

If I were to borrow some money from a credit union how much would I be allowed to borrow and what would be the interest rate?

In addition to this if I wanted to save with a credit union what would the net interest rate be?

Thanks again.

meadowcat

I'm sure OinksAce will be able to give you better details, but my understanding is that you have to be a member for a certain length of time before you can get a loan. It may be 3 or 4 months. I can't quite remember. Your first loan is usually double your savings and this increases as you prove you can repay the loan and save at the same time.

The Credit Union was good when the bank interest rate was high, but as oooOOOooo said, it may not be as good as some bank loans at the minute. However there is no arrangement fee, no penalty for paying off early and you can talk to them about any difficulty in repaying. The interest is 1% on the outstanding balance at the time you are making the payment, so if your balance is £100, then you make your agreed payment plus interest of £1. There is usually an interest rebate at the end of their year and you will get interest on your savings.

Also, if a person dies during the period of a loan, the debt dies with them and also the next of kin will get something like twice the amount of savings. There is also a life policy for £1,000 which costs something slightly over £1 a year.

Each branch probably has its own set of rules, so it would be worth going to your local branch to enquire.

mcclim

my only problem is that everytimne I go to a credit union it is closed ...

declanmcc

former_student wrote: »

I heard an advertisment claiming this was NI's best kept secret. What I would like to know is what are the benefits of the credit union? Thanks

here's a link to my local credit union. there is also a loan calculator on the site to give you an idea of how much you would have to pay out on a loan.

http://www.derrycu.com/content.asp?section=4

SnowyOwl_2

I tried to join my local credit union - there is a bit of palavar to join up. You have to attend a meeting, in Newry's case this was on a weekday evening. You have to have someone with you to nominate you, and that someone has to be a member already. They were quite strict about being a local - addresses had to be within a qualifying radius which, IIRC was quite limited.

In the end I didn't join - I sent them a note saying I was unable to attend the meeting due to a prior commitment and asked for an invite to the next one. They never got back to me.

Like anything, search around for the best deal on a loan - the credit union may well be competitive, but it may not necessarily be the cheapest. As mentioned in previous posts the way the credit union is run may be to your benefit compared to a bank. All I wanted to join them for was to put my title deeds in their safe - that facility seems to have disappeared from every bank on the high street, lol.

motorguy

I joined my local one - brownlow / lurgan - just by filling in a form. no meetings, no nominations, nothing.

OinksAce

Former Student,

The interest rate you pay and receive difffers depending on your Credit Union. Give them a call and ask, i am sure they will help you.

My Credit Union currently charges 9% per annum on loans whereas i think most still charge 12.44% per annum. ( This equals 1% per month )

The maxium you a allowed to borrow is £15000 + your shares. So if you had £5000 in shares you could borrow £20000.

My Credit Union paid out 3.75% on shares last year ( i think ). But remember about the insurance benefits.

Madowcat

Each branch is governed by the Irish Leauge Of Credit Union or possibly a British equal. Also the interest is added monthly not when you make payment.

SnowyOwl

You shouldnt have a problem joining your local Credit Union but getting a loan in the larger ones like yours is alot harder than a small Credit Union where everybody knows everyone. Plus the influx of eastern europeans is also making them more watchful.

OinksAce

SuperMario_2

seems that the Credit Union is a safer place than the bank now a days!