The Credit Union will consider loan applications from members for any worthwhile purpose. Each application is treated in the utmost confidence and will be considered on its own merits. It is credit union policy to meet the borrowing requirements of as many members as possible, depending on the available funds.
Applications for loans are made on a standard loan application form. Loans can be applied for by calling to our office. Our volunteers will give you any assistance required. Loans will then be considered by going to the Credit Committee meeting held on a Wednesday evening.
In deciding whether or not to grant the loan the credit committee will take into account the member’s record of savings and loan repayments, as well as ability to repay. Loan’s over the value of £2,000 will require proof of income and be subject to a credit check with one of the credit reference agencies. Once the loan is granted the member will be asked to complete loan agreement, which is a legally binding document being a promise to repay the loan, and to commit to regular repayments.
Remember - only members are eligible to receive loans from your credit union.
Credit unions are flexible with regard to repayment plans, though there are some legal limitations to length and amount of loans. The member will be advised on the best repayment plan to meet their own circumstances. Members are generally advised to repay a loan in as short a time as possible. 3 years is currently the maximum loan term. Should a member experience difficulties in meeting repayment commitments, they should immediately explain the situation to the credit union, which will treat the matter sympathetically and in total confidence. Depending on circumstances, the loan will be renegotiated if possible.
There are no penalties associated with clearing your loan quicker than agreed.
By law credit unions cannot charge any more than 1% per month on the reducing balance of a loan. This represents an interest rate of 12.68% APR (Annual Percentage Rate). Credit unions do not charge fees or transaction charges. Since the interest is charged only on the outstanding balance of the loan, you will pay even less if you repay in a shorter time than planned.