Credit union loans are becoming increasingly attractive to borrowers and consumers that are finding more traditional borrowing avenues blocked off. Although different credit unions may have different stipulations and terms, it is usually possible to borrow as little as £50 to as much as £3,000 either secured or unsecured. Loans will usually run for a period of several months up to 5 or 10 years or more. There are laws which govern the interest rates that credit unions can charge and their loans will usually provide a more affordable method of borrowing money than other financial products may be able to offer.
Transparent Loan Products
Credit union loans are completely transparent. There are no hidden costs and no unexpected extras. The credit union is a non profit financial group and this means that additional costs are not built into the rate or the service and you can enjoy borrowing money for exactly the rates that you are quoted. What’s more, there should be no financial penalty if you choose or are able to repay the loan early.
The main criteria for being able to borrow money using a credit union loan is that you must be a member of a particular credit union. Different unions are set up for different reasons. You may be able to find one that offers membership to people within a certain geographic location. Other credit unions are open to people that work within a specific industry or even for a particular company or group. There are, for example, credit unions for NHS workers and another for transport workers.
Credit Union Membership
Some credit unions may demand that you have saved a minimum amount before you are able to borrow money. The credit union uses the money you save in order to finance the loans and, so, saving is an important part of the process that enables others to borrow. A lot of credit unions demand that you have saved for at least 12 weeks although it is becoming increasingly common for a member to be able to borrow as soon as they become a member. You should consider the saving aspect to be important, though, and you can always continue saving even when you do borrow money with a credit union loan.
Insurance And Protection
Protection is offered to the borrower in a range of ways. Life protection is included as standard, and for no additional cost. If the worst should happen and you die before the loan is fully paid off, you can ensure that your family is protected because the insurance will repay the loan and leave your family free to grieve and get on with their lives without the additional financial strain that they would otherwise face.
Avoiding Exorbitant Borrowing Costs
Banks and other high street lenders are becoming more reticent about lending money to anybody, especially smaller value loans. The only alternative for a lot of consumers is to turn to expensive solutions such as doorstep lenders or the modern payday loan, which has come to the fore following their arrival and mass access on the Internet. However, such products carry with them very high interest rates which can make them difficult to repay and can make a borrower’s financial position much worse in the long run.
The Credit Union Loan
A credit union loan comes from a non profit financial co-operative. You do need to be a member of the union that you intend to borrow from and some many place certain stipulations on you being able to borrow money from them, but the benefits usually far outweigh these obstacles making them a viable and attractive means of borrowing up to £3,000 in cash.