How
can I borrow from a credit union?
Credit unions exist solely to serve their members. This means that members can access loans at reasonable rates. Only members can apply for loans and applicants must demonstrate that they have saved regularly with the credit union usually over a period of at least three months. Members are encouraged to continue saving even when repaying a loan. This not only helps build up the member's own savings but also contributes to the credit unions' savings pool enabling them to grant loans to more members within the community.
Benefits of borrowing from a credit union:
- There is no minimum amount you can borrow and repayments are tailored to suit individuals.
- No additional charges are applied if your loan is repaid early.
- No arrangement fees are levied.
- All loans come with free insurance. If you do not live for the duration of the loan your debt will be automatically cleared, subject to certain conditions - clickon link to "insurance" on the navigation bar on the left for more information.
- Each loan application is assessed on it own merits.
- By law the maximum interest rate is 2% per month levied on the reducing balance. This is equivalent to a 26.8% annual rate of interest
"That's what I like about it. They encourage you to save whilst you pay your loan back. You're not just borrowing more and more and getting more into debt, you have to save as well!" (Comment from market survey carried out in June - September 2001 by Beaufort Research).
Cost of borrowing
The cost of borrowing with our Credit Union over a 12 month period is illustrated below:
| Loan Amount | Weekly Repayments | Life Insurance | Total Repayment | Cost of Loan |
| £100 | £2.17 | Free | £112.69 | £12.69 |
| £300 | £6.51 | Free | £338.08 | £38.08 |
| £500 | £10.84 | Free | £563.53 | £63.53 |
| £1,000 | £21.68 | Free | £1,127.06 | £127.06 |
| £2,000 | £43.33 | Free | £2,254.18 | £254.18 |
Why not compare this to other lenders' rates - we can't be beaten for rates and personal service.
How much can I borrow?
As a guide, your 1st loans may be upto £500
Top
up loans are available but will need to be discussed with a Credit Union official
beforehand.
The maximum loan currently allowed is £10,000 above your share (savings) holding. Interest at 2% on a decreasing balance each day with no penalties for early redemption and no arrangement fees contribute to an excellent service available to members. If you took a loan with us today and repaid it back in full tomorrow, all you would pay is 1 day's interest.
You do not have to take out a loan to be a member of Caledfryn Credit Union.
How to apply for a loan
Step 1
Collect a loan application form from our Credit Union office or any collection point. Alternatively download a form from this site.
Step 2
Complete the application form as far as you can then take it, along with the proof of income to the office or any collection point for discussion with a credit union official. We will answer any queries you may have.
Step 3
Your application will then be considered by members of the Credit Committee who will make a decision. Each application is considered on its own merits and reasons for refusal will be discussed confidentially with the member in person.
Step 4
If your application is successful, you will be notified and can call at the office or collection point for your loan. You will be provided with a copy of the loan agreement and will be expected to make regular repayments as agreed. In addition you will be expected to continue saving whilst repaying your loan. Under normal circumstances your loan application will be processed within 1 week maximum
