Member-owned lending & banking organisations focused on serving you
In the UK, credit unions are member-owned organisations that form alternatives to banks and private lenders. Populated by members of a community, these operate the same way banks do and provide similar services. All types of loans; including personal loans, short term loans, and vehicle loans are provided by credit unions.
What are credit unions?
Credit unions are basically banks, but instead of being owned by shareholders or executives, these are owned and operated by community members.
There is no one owner, instead, the whole community owns it, however, a few selected members are the ones making big decisions and handling matters. These unions are democratic and members of the community vote and elect the board members.
In order to get financial services from a credit union, you must obtain membership and be part of the community. The purpose is to help each other and give back to the community, to ensure that everyone is financially healthy.
Credit unions are not focused on earning profit from the services being offered. The unions found today are as advanced as banks are; they have websites, are listed in loan comparison sites, they have mobile phone applications and all technological benefits that banks offer to their customers.
Credit unions offer a variety of services
Credit unions offer many financial products. These include bank accounts, savings accounts and special accounts for junior citizens. Prepaid debit cards, insurance products, and debt consolidation services are also offered.
As mentioned before, all types of loans (short term and long term) are also offered. Some credit unions even offer mortgage loans and car loans. There are numerous credit unions in the UK.
Products and services offered by these also differ. The terms and conditions being applicable, the processing of loan applications, as well as benefits offered are also dependent on the individual credit union.
Loans offered by credit unions
Credit unions are formed to help the members of the community financially. They are not investment propagandas or profit earning ventures. Therefore, the loans offered by credit unions are less expensive and much more affordable.
There are no hidden fees or extra costs involved, as opposed to loans offered by banks. In addition, the interest rates are fairly low and this allows people to save money and repay the debt faster.
With lower interest rates, the financial burden of the loan is also decreased, and this prevents people from compromising important expenses and their quality of life.
Repayment terms and conditions of the loans by credit unions are much more flexible than other financial services providers. In fact, you can also extend the repayment period if you have difficulty to pay the loan.
Credit unions are open for negotiation, which also makes borrowing money easier. As you are part of the community, you can also give a personal touch to your application and gives the board members insight into your struggles. Thus, opens room for leniency. This is also something that no bank can ever offer you.
There are countless benefits of credit unions
The first and foremost advantage comes from the fact that credit union allows you to save money. With low-interest rates, you can save every month and this speed up repayment.
It also allows you to create an emergency fund that can be used if a payment is missed due to various circumstances. Some credit unions also link companies present in a community. This allows staff members who are also part of the credit union to repay the loan in a better way.
The employer makes a deduction from the payroll and monthly instalments are paid. This way, there is no chance of missing a repayment.
Competitive interest rates and fees
Loans and interest rates come in all sizes and forms when it comes to credit unions. You have better options when borrowing and you have loans with competitive rates. The loans offered are much more affordable as well. Credit unions are co-operatives.
This means that profits are always shared between the members of the union. Every year, the members who save money can receive a dividend of their savings. This money can be as high as 3% and can make all the difference.
Some credit unions overlook bad credit histories. They can offer loans to those who are in tough times and in desperate need of money. As these people are members of the communities, past financial decisions are often overlooked