Ways to save and Credit Unions
Credit Unions are financial organisations that are owned and run by members. Members save money together and lend to one another. Credit Unions may be more willing to help you if you have a low income or do not have a previous record of borrowing.
How do you become a member of a Credit Union?
You can join a Credit Union if you have a common bond with existing members e.g. you live in the same area, although changes in the law now mean that Credit Unions can be more flexible about who can join. To apply to join you need to prove your identity.
How do you find a Credit Union?
Type in your postcode and some other information at Find your credit union and it will tell you if there’s a Credit Union you can join.
What services do Credit Unions offer?
It varies across Credit Unions but those offered include:
- Savings and loan accounts
- Free life or loan protection insurance
- Other insurance products (car and contents)
- ISAs (Individual Savings Accounts)
- Funeral plans
- Current accounts
- Debt management
How do they help you to get your finances under control?
Credit Unions can:
- Encourage you to budget and save on a regular basis
- Let you pay in and lend small sums of money
- Lend you money based on how able you are to repay them
How do you save with a Credit Union?
It varies across Credit Unions. You may be able to pay money in:
- At local collection points such as Post Offices or Credit Union offices
- Direct from your wages
- By Standing Order or Direct Debit
- By having your state benefits paid into your Credit Union account
How do you take money out of a Credit Union?
It varies across Credit Unions. You may be able to take money out:
- At local collection points
- By arranging payments to be made directly to your bank account if you have one
- By pass book
- By debit card at a cash machine
How do you borrow money and what are the rules?
It varies across Credit Unions but:
- You may be able to borrow as soon as you become a member, once you prove you can save regularly or prove you can afford to pay after paying all your other bills
- You may be able to borrow money up to 5 years on an unsecured loan and up to 10 years on a secured loan
- You will only be able to borrow money if other members have been good at saving and are good at repaying loans and interest on time
- You will never pay more than 2% interest a month on a loan
- You will not get charged if you decide to repay a Credit Union loan earlier
- You will be chased if you do not make your repayment