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Updated 031011 CJS

Applying for a Loan

You will need to complete an application form, available from any Collection Point or the office, or which can be downloaded here.

 

If you are applying for your first loan, you need to go to a collection point with the form and documentation, where you will have an informal interview

 

You will need to work out how much you need and the repayments you can afford. A loan repayment calculator is available here

 

• You can take the form, together with proof of income and current address.   (e.g. evidence of your income for the last 3 months, including any benefit or pension letters) and your pass book or a recent statement of your account,  to a collection point.  An informal, private interview will be arranged

 

• Alternatively, if this is not your first loan, you can post the form together with proof of income and current address.   (e.g. evidence of your income for the last 3 months, including any benefit or pension letters) directly to the Credit Union Office. The office staff may need to arrange an interview which may be able to be done by telephone.  

 

Loan applications are considered by a Loan Officer in consultation with the Credit Committee. We reserve the right to carry out a credit reference check, but a poor credit history may not lead to refusal of an application.  We do look favourably on a good history of savings and loan repayments with us.

 

Loan decisions are normally made within one week.  However, before a loan can be paid you will need to sign a loan agreement form, which is legally binding, and states the repayment terms.

 

You may choose to repay by cash or cheque at a collection point, or by standing order or by direct payment of benefits. Download the appropriate form here.

 

If the loan is approved, the money can be paid directly into your bank account, or by cheque. In some circumstances the cheque will be able to be cashed at an approved Post Office.          

 

You must save for a minimum of 8 weeks before becoming eligible for a loan. You can apply for up to one and a half times what you have in savings. First Loans must be repaid within one year.

 

Second and Subsequent Loans

 

You may apply for a second or further loan when the previous loan(s) have been repaid or a minimum of twenty weeks after you received the previous loan. For second loans you can apply for twice what you have in savings, for subsequent loans you may apply for three times what you have in savings. The maximum the law allows us to give is £10,000 or £5,000 over what a member has in savings, whichever is less.

If you have a loan outstanding, the amount remaining will be deducted from how much you can borrow.

 

To receive further loans, you must have kept to the repayment terms of previous loans.

 

The interest rate on loans is 1% per month on a reducing balance (12.68% ARP).  £100 borrowed over a year costs £6 in interest.

 

In deciding whether or not to provide a loan, we will take into account your record of savings with the credit union and any previous loan repayments, as well as your ability to repay. Once the loan is agreed, you will be asked to complete a promissory note. This is a legally binding document which is your promise to repay the loan and to commit to regular repayments.