Credit Union Loans for first time home?

szam_

Afternoon.

I was just hoping for some advice on whether this is reasonable.

I've been part of a credit union before, but this was when I was struggling to survive and they helped me out (my Aunt was a volunteer there at the time).

I have a pretty bad credit rating which in no way is a reflection on what I can afford - this due to living inside of my means when working, but two completely unexpected redundancies over the course of 3 years means it took a hammering.

I have been living in a part-furnished property for the past year after my last redundancy - this includes Bed, Sofa, White Goods, we've built up some stuff we can fit in the small apartment, but still lack things.

We don't have any savings at present, but I'm forcing the missus to get her spending under control and helping her pay it off. My job is safe (we could actually do with more staff) and I earn a fairly decent wage at present. The missus earns about half my gross wage, so our net total between us at the end of a month is £2800.

For reasons I won't go in to, we have to move urgently so it's all very last minute, viewed and accepted a property yesterday after inquiring on Monday, our savings are going on the deposit for the new place (we're moving 3 weeks prior to my tenancy actually running it's notice, that's how bad we need to move) as I can't get my other deposit back before then.

Now my question is, is it unreasonable to open an account with my local credit union and requesting perhaps £1000-£1500 to buy essential furniture and white goods, as well as moving van hire, as a first loan? We can easily afford repayments of something to the tune of £100 to £200, or even £300 a month (including payment off other debts with higher APR, we just want shut of these asap) - it's just that initial period of having nothing to sleep on, or sit on, or wash clothes with.

Do Credit Unions also credit check these days? If so, that rules it out for me, I've paid everything timely since I found a new job, I have no issues with payments and often try to make them early.

Gaz83

szam_ wrote: »

Afternoon.

I was just hoping for some advice on whether this is reasonable.

I've been part of a credit union before, but this was when I was struggling to survive and they helped me out (my Aunt was a volunteer there at the time).

I have a pretty bad credit rating which in no way is a reflection on what I can afford - this due to living inside of my means when working, but two completely unexpected redundancies over the course of 3 years means it took a hammering.

I have been living in a part-furnished property for the past year after my last redundancy - this includes Bed, Sofa, White Goods, we've built up some stuff we can fit in the small apartment, but still lack things.

We don't have any savings at present, but I'm forcing the missus to get her spending under control and helping her pay it off. My job is safe (we could actually do with more staff) and I earn a fairly decent wage at present. The missus earns about half my gross wage, so our net total between us at the end of a month is £2800.

For reasons I won't go in to, we have to move urgently so it's all very last minute, viewed and accepted a property yesterday after inquiring on Monday, our savings are going on the deposit for the new place (we're moving 3 weeks prior to my tenancy actually running it's notice, that's how bad we need to move) as I can't get my other deposit back before then.

Now my question is, is it unreasonable to open an account with my local credit union and requesting perhaps £1000-£1500 to buy essential furniture and white goods, as well as moving van hire, as a first loan? We can easily afford repayments of something to the tune of £100 to £200, or even £300 a month (including payment off other debts with higher APR, we just want shut of these asap) - it's just that initial period of having nothing to sleep on, or sit on, or wash clothes with.

Do Credit Unions also credit check these days? If so, that rules it out for me, I've paid everything timely since I found a new job, I have no issues with payments and often try to make them early.

You would generally need to ask the Credit Union. I imagine each one would have their own rules on who they would lend out to and for how long.

I think they would ask, and not unreasonably, if you have net income of £2,800 per month, and could afford to pay back £300 per month, why don't you have any savings?

Tixy

Most, but not all, credit unions require members to have started saving with them first before they take out a loan with them. They also often have a maximum amount for a first loan which may be less than the figures you are quoting.

But you need to check with your local credit union to see what they say.
Credit unions assess your affordability to repay rather than what is on your credit file.

In your position I would try to minimise what you need to borrow and try to pick things up second hand items vey cheaply or even free to start with, and replace them as and when you build up funds/receive your deposit back.
E.g your local freegle/freecycle would be worth a look. And for things like a washing machine you could consider using a laundrette until you can afford to buy.

Crystallady

My local Credit Union have a £500 max for first loan and they do credit check you and need last 3 months bank statements to check salary and outgoings.

szam_

Gaz83 wrote: »

You would generally need to ask the Credit Union. I imagine each one would have their own rules on who they would lend out to and for how long.

I think they would ask, and not unreasonably, if you have net income of £2,800 per month, and could afford to pay back £300 per month, why don't you have any savings?

I won't go in to detail, but this is the first place I've been able to afford where I haven't been struggling outside of bills to actually either a) buy bits of furniture that were not present on moving in or b) save, whilst also paying off debts from the last time I was made redundant - a little left to go, a debt I'm not proud of, even ashamed of, but I've learned from my mistakes there.

The missus also has some substantial debts (once these are paid off I'm making her close these accounts as she has a tendency to spend a lot).

As mentioned in my original post, I've only been at this job a year, and the missus has been living with me since New Years - we have saved, and some of it went on a small, cheap holiday for next month as I don't believe life is all work and no fun, my job is stressful too so it's a welcome break away from everything, the rest has to go on an unanticipated move for deposits etc as this wasn't in the plan. We simply do not have enough money between us for getting started in a non-furnished place.

I'm only 26 and have been very unlucky with redundancies, so this is the first decent job I've had. Trust me if I'd had the means to save up a nice pot of savings over the last few years, I would have done - unfortunately, as luck would have it, that hasn't happened.

The overall plan is to have 20-30k saved by 2017, with all debts paid off by July next year (we're putting 600-700 a month in to paying off debts from next month) as we do want a mortgage at some point. We've been switching and cutting back over the last few months realizing we're spending more than we need to on everything which is surprisingly is very easy to when you get a decent job for once and aren't worrying about money all the time like I used to be (i.e. TV and broadband package is now basic, switched energy supplier for a better deal, will be getting a cheap mobile phone deal when my contract runs up in November, we now shop at Aldi instead of Asda or Sainsbury's) - it's not like we're not making an effort to cut back to pay off debts and save.

szam_

Crystallady wrote: »

My local Credit Union have a £500 max for first loan and they do credit check you and need last 3 months bank statements to check salary and outgoings.

Thanks.

I think it's a couple of deck chairs and an air mattress for a while if this is the case - I haven't a clue if there is a laundrette nearby as we aren't near family so may have to do without a washing machine for a while too.

szam_

Tixy wrote: »

Most, but not all, credit unions require members to have started saving with them first before they take out a loan with them. They also often have a maximum amount for a first loan which may be less than the figures you are quoting.

But you need to check with your local credit union to see what they say.
Credit unions assess your affordability to repay rather than what is on your credit file.

In your position I would try to minimise what you need to borrow and try to pick things up second hand items vey cheaply or even free to start with, and replace them as and when you build up funds/receive your deposit back.
E.g your local freegle/freecycle would be worth a look. And for things like a washing machine you could consider using a laundrette until you can afford to buy.

Thanks for the reply.

I remember my old credit union did a loan straight away, it wasn't for a lot, it was when I was doing the FJF with a local council - minimum wage, I could barely afford food at the time, let alone furniture for the place I'd just moved in to, I was trying to set up and be independent at the time.

Their policy was you can have a loan, and a portion of your payments go towards saving - so if you paid £10, £8 went to paying it off and £2 to a savings account - it's been a while so I wasn't sure if this was a policy across credit unions broadly or whether they set their own policies, it's hard to find the time to get to mine as they close quite early.