Credit Unions

Perhaps you have been a member of the same bank since you were 16 years old. Maybe you are accustomed to the fees. Have you ever considered the advantage of becoming a member of a credit union? They are not-for profit lenders and offer many benefits over using a bank. It is inexpensive to join as well, and the locations to sign up at are listed below. In most cases a £5 deposit may be all that is required to join a credit union.

What are the Benefits?

Members enjoy some of the best benefits in the banking sector. These include preferred treatment, lower fees, optimal loan rates and zero contributions to the London Stock Exchange. Those are just some of the advantages, and their can be countless others. All “profits” are kept in the credit union, which means you are rewarded as a member/owner with lower interest rates on a loan.

Since there are no investors to send profits to (you are in g=fact an investor), the credit union does not have to extract additional fees and interest charges from its customers. That means you can get some of the best financing rates available.

Lower Interest Rate Loans

The benefit of owing money to a non-profit lender is that they do not need to overcharge you. This means that consumers can save money on fees, interest rates, and other costs that are involved in using a personal loan. You can borrow money for life’s emergencies or other needs without having to worry about paying extra for the funds.

There are essentially two options available when this type of company is set up. Most follow the example of their for-profit bank competitors. This means that they will review applications and base the interest rate on your credit rating. No matter which type of lender you use to borrow money from, a minimum credit score is required. They are very similar to banks in that higher scores can allow you to be approved for a loan with a lower interest rate.

Another less popular model is a flat rate that is extended to all members that meet minimum requirements. What this means is that each and every person who is part of the organisation receives the same benefits. So as long as you meet the minimum lending requirements, you automatically receive their best rate.

Banks generally have an obligation to overcharge people. They have higher operating expenses so need to charge borrowers more money for personal loans and other products. They also must reward their investors for buying their stock.

Credit unions do not have to overcharge, nor do they want to. Their expenses are much lower. They cater to you as a member. They will only add in a margin to cover their operating costs and expected loan losses.

Alternative Lending Requirements

A major advantage of membership in a union is that the trustees have the authority and incentive to make it easier for members to obtain financing. The criteria to borrow money is often different than what you might face at a traditional bank.

Many lenders often either exclude applicants who have a checkered credit history, or they charge them a huge premium for the privilege of borrowing money. Would you want to pay double just because you had trouble paying a bill on-time maybe many months ago? Credit unions are more likely to give you the benefit of the doubt. As a result, they may either overlook certain indiscretions or they may be less strict on other lending approval criteria.

Credit Union Personal Loans

Again, this is an advantage to using the services of a credit unions. They are known to offer some of the lowest cost financing options to individuals. There is also less pressure on them to require collateral as a security interest for the loan. More important factors include your length of employment, payment history and current income.

All different types of loans, including personal or home mortgages, are easier to obtain through credit unions, and they are generally cheaper. Many of them offer lending criteria that are fairly relaxed when compared to the requirements of most big banks.

You have a higher chance of approval, yet a lower expected interest cost. There are less fees, higher customer service ratings, and many other services provided. It really is a better option, which begs the question: Why would anyone borrow from a loan shark or pay higher rates for a commercial lender?

Fear of Rejection?

It is a well-documented fact that lower income borrowers prefer to apply through fringe banking outlets. They often turn to payday lenders and other high-priced predatory lenders who they believe have a higher loan application approval rate. We all go where we are most likely to be accepted, and most borrowers are no different.

Yet if you can show some faith to the credit unions that provide you with better loan options, you might have a much better chance at getting the money you need for paying bills or maybe your rent without having to overpay. Sure banks are often not trusted. There are also many concerns with using payday lenders. But you can trust your local credit union.

The best bet is to find a credit union where you are qualified for membership and to complete their simple application process. It is true that some are very exclusive. Most though are opening their doors to anyone who lives, works or worships in the local community. Even if you live 300 km away, you can still attend church locally and qualify for membership. Once a member, you can apply for loans the same day.

Consumers need to reevaluate their approach and options when it comes to borrowing money. Take the time to discover the true benefits of credit union membership. Regardless of where you live in the UK, they can help you meet your financial obligations while helping you purchase your major assets on credit.

Contact your local Local Credit Union

There are locations across the nation, and consumers should always contact them when they need to borrow money as the credit unions are just one more option for people to explore. The interest rates will often be lower and they offer other benefits as well.



Bromley and Lewisham


Derbyshire County







Tees Valley

Torfaen, Monmouthshire

The listing above is only a sampling, and almost all cities and communities will have a credit union for individuals and families that live in the area. Not only can people take out a loan from them for their financing needs, but they will also offer their members other services such as access to savings accounts and general financial advice.


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