Credit Unions
A Credit Union is a profit sharing, democratically run financial
co-operative which offers convenient savings and low interest loans
to its members. The members own and manage their credit union
themselves.
Main Aims:
- to encourage its members to save regularly.
- to provide loans to members at very low rates of interest.
- to provide members with help and support on managing their
financial affairs (if required).
What are the benefits?
- it is an easy and convenient way to save and borrow money.
- it offers very low cost loans.
- insurance at no direct cost.
- it's a way to learn new skills.
Credit unions can provide a focal point for a community by
bringing people together, to work alongside each other for their
own benefit and the benefit of the community as a whole with
organised events, family fun days, quizzes, etc.
A credit union can help to revive the local economy by keeping
money in the community. Loans to Members can mean income for local
shops and businesses.
Who supports Credit Unions?
- Churches
- Community Groups
- National Consumer Councils
- Citizens Advice Bureau
- Trading Standards
- Police
- Fire
- Taxi Drivers
- Local Authorities.
How do they Work?
The members make regular savings, as little or as much as they
wish. These savings then form a common pool of money from which
loans are made to members. When members have been saving for a
certain period of time (usually about 12 weeks) they can apply for
a loan from the pool. Interest on the loan is charged at only 1%
per month on the monthly reducing balance. 12.68% Annual Percentage
Rate (APR).
