Credit Unions

  • Do you need a low cost loan?
  • Do you want a safe and easy place to save?
  • Would you prefer to deal with a local trust provider?

If your answer is yes, then read on!

Credit Unions in Derbyshire have come together to form the Derbyshire Fairer Money Campaign under the collective name "Community Banks Derbyshire".

What is a credit union?

Credit unions are financial co-operatives owned and controlled by the members. They are not for profit and provide banking services to their members. They promote saving, provide credit at reasonable rates and offer other financial services for their members.

What can a credit union do for you?

  1. Mutual and ethical savings – credit unions offer a range of savings accounts. You can save as little or as much as you can afford. They operate on values and principles set out by the members.
  2. Affordable loans – Credit unions offer loan products suited to your individual needs at rates you can easily afford. The interest is charged only on the reducing balance. There are no set up fees and no charges for early repayment.
  3. Run by you, for you – As a Credit Union member you are in control of your own finances have a say in how your credit union is run. Credit Unions all operate within a “Common Bond” which might either be the common bond of an area, or of an employer or an association.
  4. Putting you first – Credit Unions serve you “the member” by listening to your needs and developing the products and services that you want.
  5. Safety – Credit unions are regulated and authorised by the Financial Conduct Authority and the Prudential Regulation Authority. They are part of the Financial Services Compensation Scheme just like banks and building societies, so your money is always protected.

Credit Unions can offer products not offered by the banks – such as Jam Jar accounts, or Rent Accounts. These can help you budget by paying your rent, council tax, utility bills and so on for you, so you always know how much spending money you have left.

They also offer accounts for special events such as Christmas or Holiday Saver accounts. Some credit unions also offer interest bearing accounts such as Cash ISA’s and Junior ISA’s.

The low-down on APR

APR (annual percentage rate) is the rate the lender charges on a loan or credit.

APR includes both the interest rate and any charges such as arrangement fees.

APR varies from lender to lender.

Generally the lower the APR, the better it is for you.

Remember, if you do not pay a loan back over the term agreed you will pay more interest.

So always check it and compare

Here is an example of typical lenders rates

Loan Provider Amount Borrowed Weekly Payable Interest Charged Interest saved by CU member
Credit Union
26.8% APR
£500 £11
(52 weeks)
£58 -
LoansAtHome4u
281.5% APR
£500 £20
(41 weeks)
£320 £262
Shopacheck Financial Services
254% APR
£500 £17.50
(50 weeks)
£375 £317
Provident Personal Credit
272.2% APR
£500 £17.50
(52 weeks)
£410 £352
Midlands Community Finance
40% APR
£500 £18
(48 weeks)
£369 £311

Comparing Credit Unions with other types of Lenders

  Credit Union Bank Payday Loan / Doorstep Hire Purchase Loan Shark
Savings
Loans
Banking Services Some
Interest Fixed Fixed Variable Fixed Unknown
Regulated
Credit Check Sometimes
CCJs/Bankrupt

© Financial Action & Advice Derbyshire 2014