Frequently Asked Questions (FAQ).
Download a printer friendly version

Are you like a bank?
As a co-operative all our members are shareholders and so the benefits from successful growth of a credit union are more widely distributed than in traditional financial institutions: whilst banks might invest in the arms trade; we invest in our local community.

Is my money safe?
We are regulated and authorised by the Financial Services Authority (FSA), just like any other bank. Our staff and Board of Directors are designated as ‘authorised persons’ by the FSA which means they undergo a range of checks to protect you and your shares in the business, which are also kept in a separate account. All of our members' savings are protected by the Financial Services Compensation Scheme.

What rate of interest do you charge?
We charge 2% per month on loans of under £1,500 (26.8% APR) and 1.5% per month (19.6% APR) on loans between £1,600 and £2,500. All loans above £2,600 are charged at 1% per month (12.7% APR). We will reduce our interest rate by 0.5% on loans between £1,600 and £2,500 if your savings are worth more than one third of the loan we grant e.g. if you had £700 in savings and borrowed £2,000 we would reduce our interest rate from 19.6% APR to 12.7% APR.

How much interest do you pay on savings?
You receive a share in the organisation's profits, rather than receive a fixed rate of interest, although this is paid as a percentage of your savings. Initially the return you will receive may be less than the rates paid by the bank, but as the credit union grows so will your dividend. Our members also have a choice to invest any profits back into the business. At our last AGM in November 2007 all of our profits (equivalent to a 2% dividend) were invested back into the business to help with our move to new premises.

Do you lend money for rent deposits?
No. Because private sector tenancies are so short-term it is not realistic to expect a rent deposit to be repaid within, for example, just nine months. Many applicants for such loans are on very low incomes where it is not practical to expect such a tight budget to stretch to the repayment of a loan. As many of these people are in 'priority' need, then there is a clear duty on the local authority to help them. For this reason we are currently running a pilot rent bond scheme with the City Council. You must be referred by the relevant City Council Officer before you can join this scheme.

There is an exception to this rule, if you meet ALL of the following criteria. You can apply for a maximum of £500 towards your deposit if you:

1. You are on one of our payroll deduction schemes
2. You have worked for your employer for more than 1 year
2. You have a tenancy agreement of nine months or more
3. You can show us a copy of the agreement to prove where you will be moving to

There are no exceptions to this criteria.

What identification do I need?
Like any financial institution we need to have proof of who you are and where you live. We will be flexible with these needs as long as our legal obligations are being met. A passport and utility bill will get an account open as would a letter from the tax credit office together with a bank statement. A letter from the job centre confirming what benefits you are on together with a council tax bill would also be sufficient. More information can be found by downloading a copy of our identification checklist from our website or contacting the office.

How do I join?
Joining is simple. Fill in an application and either send or bring it into the office with a photocopy of two forms of identification to show 1) where you live and 2) who you are. You will also need to pay an initial deposit of £4 plus a one off £1 membership fee. If you are applying for a loan the membership fee will only be due when you collect your loan

Do I have to give notice to withdraw money?
The Credit Union account is a no notice savings account, but we need time to process any share withdrawal request. After you have filled in and signed a share withdrawal form, we need to check to ensure you have enough money in your account and then draw up a cheque. We aim to get this done in 3 working days, but you should allow 5 working days. You must bring identification with you to receive your money.

Can I withdraw cash from the Credit Union?
For security reasons we issue cheques only. These can be paid to you, a third party or for cash. Cheques payable for cash can be up to £500 in value and be cashed at a local post office.

How do I pay into the Credit Union?
You can pay in cash, by cheque, via standing order or bank transfer. If you are working for certain local employers you can also save directly from your pay packet. You can download a standing order form from this website. You can also pay into your account using a Pay Point card. If you would like to order a card - please contact the office.

Can I set up the bank payments myself?
Yes. All you need are our account details from the standing order form and your reference number. The reference number is ESSENTIAL and is formed by your account number and name, followed by the share account you would like your money paid into. For example 1234: Joan: Smith: S1

What is my share account?
You can have up to 4 savings accounts. By default your payments are posted to your share 1 account, but you could open separate accounts to help you designate your savings. For example you could use share account 2 to save for Christmas or share account 3 to save for a holiday.

How much can I borrow?
This will depend on your financial circumstances. We specialise in loans of £3,000 or less as we believe we are the best deal for loans in this range. We have a maximum first loan of £400 if your weekly income is between £125 and £150 and a maximum loan of £900 if you income is £250 per week. These rates are increased for people who have saved or who are on one of our Payroll Deduction schemes. More information is available on our loans fact sheet.

Do you use credit scoring or credit reference agencies?
We use our own scoring system which is based on meeting the needs of our members. We share information on your credit history with Equifax.

What if I can’t repay my loan?
We realise that things happen that make it difficult to keep up with repayments. The most important issue is to keep in touch – we can always look at rescheduling your loan if your circumstances change. As you are borrowing from your local community we are obliged to protect your investment. We do take people to court to ensure that this money is repaid; we enforce county court judgements and can apply to the Department of Work and Pensions for repayment of the loan direct from certain benefits. If you fall behind with payments interest will accrue and it s always a good idea to try and pay off a bit extra when you can as it will save you money .

Do you give debt advice?
Our staff have a basic understanding of money advice to help us understand the problems you may be facing. We now have funding from the Big Lottery Fund for a Budgeting Worker and you can find out more about this service on this website.

How do I get more involved?
We are always looking for members to volunteer at the offices and run regular recruitment rounds. All members are also eligible to stand for election to our board of Directors.

This page was last updated on 23rd June 2008

Contact us if you have any further queries