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The credit union answers your questions

London Capital Credit Union

What is a credit union?

We are a savings and loans co-operative that encourages people to save rather than borrow. We aim to help our members save money, but also provide low cost loans when needed. After we meet our essential running costs any surplus is given back to the membership through a dividend payment.

Are you like a bank?

No. As a co-operative we are owned and controlled by our members so the benefits from successful growth of a Credit Union are more widely distributed than in traditional financial institutions: whilst banks might invest in repressive regimes or the arms trade, we invest in our local community and our profits are given back to our members.

Do I have to give notice to withdraw money?

Yes. We usually transfer BACS payments to your bank account the same day but you MUST allow up to 3 working days for receipt of funds. To set this up you need to proof of ID and address. Once this is done, simply call the office or log into the website to request a withdrawal.

Can I Access My Account Online?

Yes, once you have provided proof of ID and address you can register for online access at our website www.credit-union.coop People can join online, check balances, and request withdrawals.

Is my money safe?

We are regulated and authorised by the Prudential Regulation Authority & Financial Conduct Authority & members’ savings are 100% covered by the Financial Services Compensation Scheme.

What rate of interest do you charge on your loans?

Our interest rates start at 6%apr but the typical rate is for our ‘Saver Loan’ which is 12.7% apr charged on the reducing balance.

If you borrow £1,000 and pay it back in 12 months you will pay a total interest of only £67! We also offer an instant access ‘Instant Saver’ and ‘’Flexi Loans’ at slightly higher rates. The latter has no minimum savings requirement which often makes the repayment lower. There are no hidden set up fees, insurance payments and we do not penalise you for repaying a loan off early or making late repayments.

How much interest do you pay on savings?

You receive a share in the organisation’s profits, called a ‘dividend’ rather than a fixed rate of interest. This is paid annually, as a percentage of your savings and also a rebate of loan interest paid.

What identification do I need?

Like any financial institution we need to have proof of who you are and where you live. Unlike high street banks we will be flexible with these needs as long as our legal obligations are being met.

Does it cost money to join?

There is normally a one-off Life Membership Fee of £5 to cover our initial administration costs. This is usually deducted from you first payment. We levy an annual £10 dormant account charge but only if you make no inward or outward transactions within a 12 month period, to cover the costs of maintaining such accounts.

Can I withdraw cash from the Credit Union?

For security reasons we issue cheques only. Cheques for cash up to £500 in value can be cashed at the nearby Archway Post Office. Please allow up to five working days to make a cash withdrawal.

How do I pay into the Credit Union?

Many employers allow you to save directly from salary. To do this you must save a minimum of £10 per month and the cut-off date for payroll is the 29th month for the deduction to be made the following pay day. You can also pay by standing order from your bank, or by cheque, postal order or bank transfer. (Cheques payable to yourself or to ‘Credit Union’). There is no minimum savings payment when paying direct, unless you have a loan.

Can I set up standing order savings payments myself?

You simply need to instruct your bank to make a regular standing order payment, quoting your membership number as a reference. Without this there will be a delay in transferring the money to your account. Your reference number is made up of your 8 digit membership number.

What is my share account?

You can several different savings accounts. By default your payments are allocated to your share 1 account. You can have separate accounts, for example you could use share account 2 to save for Christmas or share account 3 to save for a holiday, or share account 4 for a car.

How much can I borrow?

This is based on affordability. The loan sum may be greater if you have built up savings with us, are on one of our payroll deduction schemes or have borrowed from us previously. We give most consideration to your ability to repay.

When can I borrow?

You can apply to borrow at any time but we give priority to those members who have saved for a 3 month period and/or are using a payroll deduction scheme.

Do you use credit scoring?

Yes, but we do not believe that your employment status or external credit rating should determine whether you can borrow from us. Whilst we would perhaps lend larger sums to people in work, but this is based on their ability to repay and not on an arbitrary credit score. Whilst most people will not get cheaper loans anywhere else, we specialise in offering relatively small loans to people who may only be able to go to doorstep lenders, or payday loan companies who charge up to 7,000% apr. For this reason we use our own scoring system which is based on your ability to repay.

Do you use credit reference agencies?

Yes. A past difficulty repaying loans will not automatically prevent you from borrowing from us. We may use a credit reference agency to verify your ID and exposure to other debts. We are currently considering using the agencies to report on repayments of our loans. So if you repay a credit union loan in accordance with your agreement this will help your credit rating in future.

What if I struggle to repay my loan?

Don’t panic. We realise that things happen that make it difficult to keep up with repayments and understand the problems you may be facing. The most important issue is to keep in touch with us. We can almost always come to an arrangement such as temporary repayment holidays or rescheduling loans to lower the repayments. As you are borrowing from other members’ savings we are obliged to protect this money so we will take people to court to ensure that this money is repaid and we do enforce county court judgements with such costs being borne by the defaulting member.

Visit our website to find out more: www.credit-union.coop and to register for online access or telephone: 020 7561 1786 Email: info@credit-union.coop