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Credit Unions - an alternative to payday loans / accurate at 22.09.2015


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I've been a member of my local Credit Union for over 10 years, they have helped me out a number of times when things are hard.

I can borrow £500 from my Credit Union over a one year period, paying £12.50 per week.

£10.48 going towards the loan and £1.66 towards savings.

 

(The above is based on having savings of £250 in my Credit Union Account, thereafter, once a good payment record has been established, I can borrow up to 4 times the amount I have in my savings account)

 

Total interest for the loan = £63.50

 

Total Interest for a similar Provident Loan over the same one year period would cost £410 in Interest.

 

Like the majority of Credit Unions you have to be a member and have saved for a minimum of 3 months.

 

Most Credit Unions are (not for profit) organisations, run to serve the local community and help them avoid high interest rate lenders who prey on those who can least afford it.

 

Credit Unions also provide free life cover so you can rest assured your family will not be burdened if anything happened to you, as your loan will be cleared and shares doubled and paid to your estate.

 

Here are some examples regarding Pay Day Lenders.

(sourced from the internet on 15th February 2013)

 

Payday UK

 

Borrow £200 and pay back in 30 days - interest charged £50

The same loan with a Credit Union would cost £3.94 in Interest

 

WONGA

 

Borrow £200 and pay back in 15 days - interest charged £29.59

The same loan with a Credit Union would cost £1.97 in Interest

 

Quick Quid

 

Borrow £200 and pay back in 30 days - interest charged £50

The same loan with a Credit Union would cost £3.94 in Interest

  • Confused 1
Any advice I give is honest and in good faith.:)

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  • 2 years later...
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My Credit Union has just informed me that over the past 3 - 4 years they have not grown, in fact their membership has declined rapidly resulting in a situation where they are currently under threat of closure in the near future due to the financial and regulatory requirements set by goverment and the Financial Conduct Authority (FCA)

 

They have not been able to invest in up to date IT systems or promotions due to lack of income.

 

They have said the operate in a highly regulated environment and must comply with certain financial requirements i.e. they have to maintain a minimum amount of money in reserve.

The minimum is currently approximately £15,000. They currently have in reserve £16,000. In the last year they have made a loss of £9,000.

If they made a similar loss this year they will be non-compliant on a key measure of viabillity and the FCA would require them to close, merge or find substantial investment capital.

 

They have planned a Special General Meeting to gain member's approval of a merger with two other Credit Unions of similar size, members and ethos.

 

I've been a member for over 10 years now and it would be a loss to the community if they had to close, in the past few years they had funding withdrawn and had to move from a shop in the High Street in my area to a small room inside a industrial area, which has lost them a lot of new members who have no idea they exist.

 

Next month they are moving back to the High Street in a small shop used for the past few years by our local Labour candidate.

 

I'm hoping the merger goes ahead and they continue to support the community.

Any advice I give is honest and in good faith.:)

If in doubt, you should seek the opinion of a Qualified Professional.

If you can, please donate to this site.

Help keep it up and active, helping people like you.

If you no longer require help, please do what you can to help others

RIP: Rooster-UK - MARTIN3030 - cerberusalert

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Hi tawny,

 

I've a feeling most credit unions are not easily accessible for a great number of people, when I first joined my local credit union it was run in someone's flat in the back bedroom.

Even now years later they are not on the internet, they are only open for a few hours 4 days a week and like you say are run by local volunteers.

 

You have to go into their office to apply for a membership and have to be a saving member for some months before they will offer you a loan, I'm really not surprised they are having a hard time keeping the place open, I think before for a number of years they had government funding which kept them operating.

 

I know at my work there is a very large Credit Union and they do advertise on employee's payslips, I believe their membership is very high.

 

I'm not sure what the answer is, but Credit Unions need help from somewhere.

Any advice I give is honest and in good faith.:)

If in doubt, you should seek the opinion of a Qualified Professional.

If you can, please donate to this site.

Help keep it up and active, helping people like you.

If you no longer require help, please do what you can to help others

RIP: Rooster-UK - MARTIN3030 - cerberusalert

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I visited our Local Credit union at the beginning of this year to see what it was like - so I could comment on the thread, TO. I joined the Christmas Club and also started a savings account.

 

Whilst they are only open twice a week - the voluntary staff are really nice people.

 

Nice one CB :)

Any advice I give is honest and in good faith.:)

If in doubt, you should seek the opinion of a Qualified Professional.

If you can, please donate to this site.

Help keep it up and active, helping people like you.

If you no longer require help, please do what you can to help others

RIP: Rooster-UK - MARTIN3030 - cerberusalert

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Well i must admit after reading all your posts and looking at the Credit Unions as i have this last week.

I clearly must join one.I know where my local one is.

 

The sooner the better, let us know how you get on :)

Any advice I give is honest and in good faith.:)

If in doubt, you should seek the opinion of a Qualified Professional.

If you can, please donate to this site.

Help keep it up and active, helping people like you.

If you no longer require help, please do what you can to help others

RIP: Rooster-UK - MARTIN3030 - cerberusalert

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  • 4 weeks later...

Tawny, that looks quite posh compared to mine :)

Any advice I give is honest and in good faith.:)

If in doubt, you should seek the opinion of a Qualified Professional.

If you can, please donate to this site.

Help keep it up and active, helping people like you.

If you no longer require help, please do what you can to help others

RIP: Rooster-UK - MARTIN3030 - cerberusalert

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  • 2 months later...

Noticed my credit union has just had a name change to CASTLE COMMUNITY BANK and for the first time anyone with an EH postcode can join.

Any advice I give is honest and in good faith.:)

If in doubt, you should seek the opinion of a Qualified Professional.

If you can, please donate to this site.

Help keep it up and active, helping people like you.

If you no longer require help, please do what you can to help others

RIP: Rooster-UK - MARTIN3030 - cerberusalert

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  • 2 months later...

My work's credit union reports to the CRA'S my local one has not in the past 20 years but they have just merged with a larger Credit Union and are going on-line, I've a feeling they will start reporting also.

Any advice I give is honest and in good faith.:)

If in doubt, you should seek the opinion of a Qualified Professional.

If you can, please donate to this site.

Help keep it up and active, helping people like you.

If you no longer require help, please do what you can to help others

RIP: Rooster-UK - MARTIN3030 - cerberusalert

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  • 3 months later...

World Credit Union Conference underway in Belfast...

 

http://www.thenews.coop/107319/news/business/world-credit-union-conference-opens/

Any advice I give is honest and in good faith.:)

If in doubt, you should seek the opinion of a Qualified Professional.

If you can, please donate to this site.

Help keep it up and active, helping people like you.

If you no longer require help, please do what you can to help others

RIP: Rooster-UK - MARTIN3030 - cerberusalert

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