What are Credit Unions??
Credit Unions are profit sharing, democratically run financial co-operatives owned and managed by their members and offer convenient savings and low interest loans to its members.
Main Aims of Credit Unions
- Encourage members to save on a regular basis
- Provide loans to members at low affordable interest rates
- Provide members with help, information and support on managing their finances
Benefits of a Credit Union
- Easy and convenient way to save and borrow
- Affordable low cost loans
- Insurance at no direct cost
- Learn to manage your money
- Provide a focal point for the community
- Help the local economy by keeping money in the community
Credit Union Supporters Include:
- Citizens Advice Bureau (CAB)
- Community Groups
- Local Authorities
- Trading Standards
How Do Credit Unions Work?
The membership criteria of a Credit Union are called the ‘common bond’ this is something that applies to all members It is often something like living or working in a particular area. Credit Unions welcome everybody from within the ‘common bond’ regardless of their age, employment status or income.
To join a Credit Union (become a member) an application form will need to be completed and proof of ID provided, this can usually be done at one of the Credit Unions collection points.
Members make affordable regular savings that form a common pool of money from which loans are then made available to members.
Once a member has a reliable record as a saver they can then apply to borrow money (a loan) from the pool at a low affordable rate of interest.
The amount a member can borrow will depend on how much they need, what they can afford to pay and the individual Credit Unions policies.
Credit Unions are insured against fraud and theft
Credit Unions provide life and loan protection insurance or are members of a Death Benefit Trust. There is no direct cost to members for these services and members are able to nominate a beneficiary.
Credit Union Security and Regulation
They are covered by the Credit Union Act 1979
The Financial Conduct Authority (FCA) regulate Credit Unions in England, Scotland and Wales
Details and Information on National Credit Unions
Credit Union Forums and Discussion
Forums can be useful for asking questions and also seeing that other people are going through the same things as you. You will have to sign up to them to post new messages but can read them without.