The short answer is: It is a friendly place to save and borrow where people are encouraged to save and then become eligible for low cost loans.
The long answer is: It is a non-political, financial co-operative, owned and controlled by its members, which exists to provide a convenient savings and low cost loans service.
Although Credit Unions (CUs) have been around for over a hundred years, and are popular in the north of England, Ireland, the West Indies, Canada and Australia, they are not well known in the south east.
How it works
All credit union members must have a “common bond”, for example, all employees of a particular organisation, or people who live and work in a defined area.
Members’ savings go into a pot from which loans are offered at a low rate of interest. Credit unions are overseen by the Financial Services Authority (FSA), and by law must be fully insured, so savers cannot lose their savings (unlike Christmas Clubs, such as Farepak). Interest is not paid on savings, but a dividend can be paid, up to a ceiling of 8% per annum.
Credit Unions make their profit by lending out the money at a maximum rate of 2% per month on a reducing balance. After saving regularly for 8 weeks, a member can borrow up to 3 times their savings, or £500 plus their savings. This is particularly useful to people on low incomes who may need to borrow in a crisis, e.g. for car repairs. The regular banks are not interested in lending smaller amounts, and the ‘doorstep lenders’ who will lend, routinely charge interest of around 175%.
At the moment (Autumn 06) Credit Unions also have access to an extra fund from which they can make loans under certain special circumstances to people who have not previously made any savings. Those eligible include those on low incomes and people who have lost Christmas money saved with Farepak.
Contact a Credit Union
See also Credit Unions
Essex SaversNet Credit Union Ltd
53 New Street,
Chelmsford, CM1 1AT
Phone 01245 496235
http://www.essexsavers.co.uk/
For anyone living or working in Essex, the Union currently has collection points in Laindon, Basildon, Chelmsford, Harwich – new ones are being added. If there is not one near you, you can join by post.
Ipswich & Suffolk Credit Union Ltd
63 Austin Street, Ipswich,
Phone 01473 690690
For people living or working in Suffolk. Numerous collection points.
http://www.onesuffolk.co.uk/ipswichandsuffolkcreditunion
Holdfast Credit Union Ltd
The Centre, 90 Newland Street,
Witham, CM8 1AH
Phone 01376 516994
http://www.holdfastcreditunion.co.uk/
Newham Credit Union (Newcred)
Head Office,
1 Water Lane,
Stratford E15 4LU
Tel: 020 8555 5388
http://www.newcred.co.uk/
London Community Credit Union
473 Bethnal Green Road,
Tower Hamlets
London, E2 9QH
Tel: 020 7729 9218
http://londoncu.co.uk/
For people living and working in Witham and Braintree.
Other credit unions exist covering most of the areas where Swan has housing.
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