Credit Unions 

Affordable credit for residents  

• What is a Credit Union? 

  A Credit Union is an organisation owned and jointly managed by its members which offers convenient savings and low interest loans.

   

• The three main aims of a Credit Union are 

  • 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 of a Credit Union? 

  • It is easy and convenient way to save and borrow 
  • It offers very low cost loans 
  • Insurance at no direct cost 
  • It's a way to learn new skills 
  • 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 and Local Authorities.

   

• How do they work? 

  The members make regular saving, as little or as a 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 cent per month on the monthly reducing balance. 12.68 per cent Annual Percentage Rate (APR).

   

• Who can join a Credit Union? 

  People who join a Credit Union must belong to what is called a 'Common Bond'. This could be that you reside in a specified area, or you work for a particular employer or that you are a member of a club or association.
  
  Credit Unions welcome everybody from within the Common Bond regardless of income, employment status or age.
  

   

• How much will I need to save? 

  Whatever you can afford - £5 a week, £1 a week, 50p a week. The only requirement is that you save regularly.

   

• How much can I borrow from Credit Union? 

  Most credit unions expect you to save regularly for about 12 weeks before allowing a loan and any loan will be related to your savings in some way.
  
  The amount you will be able to borrow will depend on how much money you need, what you can afford to repay and the credit union's policies.
  
  In the early days the credit union will allow small loans, becoming bigger as the credit union gets bigger.

   

• Will I get interest on my savings? 

  As a Credit Union grows, it may declare a dividend at the end of the financial year. It can pay a dividend of up to 8 per cent a year, although it will be unlikely to be able to afford as much as this during the first few years.

   

• Security 

  • Credit Unions have to be registered with the Financial Services Authority 
  • They are covered by the Credit Union Act 1979 
  • They are independently audited 
  • They are regularly monitored by the Financial Services Authority 
  • Your business is private in the credit union because all members and officers who have access to personal information must act in a confidential manner at all times

   

• Are they insured? 

  • They are insured against fraud and theft 
  • They provide life and loan protection insurance at no direct cost to the member payable to a nominated beneficiary 
  • The life savings insurance means that if you die, your beneficiary can receive up to twice the value of your shares 
  • The loan protection insurance covers the amount of your loan outstanding

   

• Further information 

  For further information visit Liberty Credit Union at one of the following locations or contact them at the address shown.

  • Barking Learning Centre - Every Tuesday (11am to 2pm)
  • Castle Green Children's Centre - First Wednesday of the month (2pm to 3.30pm)
  • Dagenham Library - Every Thursday (11am to 1.30pm)
  • Wellgate Children's Centre - Last Wednesday of the month (1pm to 3pm)