Try a Credit Union (Credit Unions)

Member Name: SusanLesley

Product:	Credit Unions
Date:	04/02/01 (296 review reads)
Rating:

Advantages: Good interest rates and very flexible

Disadvantages: Not available everywhere

I have been a member of my local credit union, Walsave, since it began 3 years ago as both a saver and a borrower.

I joined via my then employer, Walsall MBC, who were sponsoring the setting up of the Credit Union. The authority initially paid the salary of the Credit Union manager together with providing the office space free of charge.

The whole thing has grown rapidly and now pays its own manager plus two further staff. It has also encompassed other areas to increase the number of members – South Staffs Water Works and Neighbourhood Committees for example.

You can borrow up to four times the amount of your savings and set a monthly repayment to repay the loan within 2 years. You can repay as fast as you wish but two years is the maximum length of any loan. You must also continue to save as you repay the loan but this need only be the minimum £10 per month. The savings are used as collateral for the loan.

You can withdraw from your savings whilst repaying a loan but only if the amount of the savings is higher than the amount outstanding on the loan. You can then withdraw the difference between the two.

The interest rate is on the loan is calculated on a daily basis and equates to 1% per month. You can also repay further amounts at any time, thus giving you total control over the amount you owe. Once you have paid off a third of the loan you are allowed to take out top up loans up to four times the amount of your savings.

There is a dividend paid out annually to members based on how well the union has performed during the year. This is capped at 8% by law, and is based on the average savings over the year.

The Credit Union also provides free life insurance so that if a member dies any outstanding loan balance is written off. You can also sign a form to say who you would like to receive the balance of your saving s in the event of your death.

Enquire at your local council or citizens advic
e bureau for further details.

Summary: