Do You Use Your Local Credit Union

dsk19s

I thought i would put a post on about using your local credit union for loans, as if your in the same situation as me and cant get credit or loans with low apr's then your credit union is brilliant.For those people who dont know how it works is you save with them each week or month then if @ some point you need a loan they will lend you double of what you have saved then after 3 loans succesfully paid back you then have the option to take triple what you have saved and their apr is 12% or 1% per month, but saving with them isnot that good as you dont earn interest on your saving but you do get dividends not much mind you. Also the great thing about it is theres no credit checks the only thing you do is fill out an income expenditure form to show you can make the payments and they can be spread over 3 years.
I hope this is of help to some of you thanks darren

fatbelly

I think 1% per month is more than 12% apr, isn't it? Doesn't sound brilliant. Do they all charge that much? But I do take your point about credit checks.

hurricanewyn

My credit union in Newport charges that much, but regardless of the rate I would stick with them for loans. They do provide low cost loans to all members & when I came to the UK first I couldn't open a bank account, never mind get a loan so they really were a godsend. They also encourage responsible saving, you have to have at least half of what you plan to borrow and you have to continue to save while paying back your loan. (I'm from Ireland though, and Credit Unions are on every street corner - I don't know a single adult at home who doesn't have a credit union account!)

deedee_3

Hi! Can some one tell me how I find out if there is a Credit Union in my area?

Many Thanks

jen_jen_2

try https://www.abcul.com

they have a bit where you can put your details in and find out if there is a credit union near you.

with ref to the apr yes its 12% and not the lowest around but credit unions are filling a gap and competing with doorstep lenders eg Provident who charge 177% apr. when you look at it that way they are invaluable to the many many people who have poor, little or no credit history.

hurricanewyn

I just wanted to add that the Credit Union charges 1% on the reducing balance of your loan - so the quicker you an pay it off the less you'll have to pay

Milarky

My credit union used to charge 1% per month on loans - and even flirted with 6% pa on loans over £3000. But following a little heard or review of the CU Act last year the cap was lifted from 1% per month to 2% per month. So even the fans of CUs who think that lending at 12% pa is 'good' will have to admit that lending at up to 25% pa is going to be only 'half' as good.

I have just received a 'newsletter' from my CU where the current rates are set out:

£1-1000 1 to 52 weeks:
1st loan 21.9% apr
2nd loan 20.7% apr
3rd loan 19.6% apr

£1001-5000 1 to 104 weeks:
1st loan 19.6% apr
2nd loan 18.4% apr
3rd loan 17.2% apr

£5000+ 1 to 156 weeks:
1st loan 17.2% apr
2nd loan 16.1% apr
3rd loan 14.9% apr

So now my all loans from my CU are above the previous legal limit (which lasted from 1979, through all the years of high inflation until 2005, when Gordon Brown saw fit to abolish it on the 'QT') Should borrowers have grounds to rejoice? Are CUs the 'new' ZOPA? (I doubt it)

corris3

I have been looking into joining the local credit union,not for the loans, as fortunately I am debt free except for the mortgage which is on targert to be paid off fully in April 07, but for savings. I know I can get better saving rates elsewhere but saving even just a little with the credit union gives it a stronger financial base from which to help other local people who need loans and help to get out of debt. Ethically it appears to make sense, encourages savings and good money sense in that you can only borrow when you have saved, helps people avoid high interest money lenders and contributes to the local community. The local credit union here also does special deals for young savers.

I think I'll give it a go.