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Here are some answers to some frequently asked questions:
Yes, the credit union is authorised and regulated by the Financial Services Authority. Members' individual savings are protected under the Financial Services Compensation Scheme, just like banks and building societies. This means that your savings are secure if anything were to happen to the Credit Union - up to a maximum of £75,000 per person.
We are a small credit union and in order to keep loan rates as low as possible and to allow as many people within Northumberland to access the services of the Credit Union we can not currently pay interest (actually a dividend) on adult accounts. As the Credit Union increases in size this will be reviewed and a dividend may be payable in future. Keep spreading the word about us and that will help us reach that point.
Yes, all you need to do is fill in a 'repayment of shares' form and post it to our free post address, your shares will then be transferred into your bank account of choice or we will send you a cheque.
+ - Are loans from you really more affordable than from a door step lender or pay-day loans type providers? Click to collapse
Yes,we are more affordable than doorstep lenders such as Provident and Shopacheck or even worse, loan sharks. The doorstep lenders often charge an interest rate in excess of 100% and the customer can end up paying more than double the amount borrowed. With loan sharks the position is considerably worse with APRs in excess of 1000% not unknown and customers being caught up in a cycle of borrowing with ever increasing debts and the fear of violence in the case of default.
The credit union represents a much better option for people in this situation with interest rates capped by law at 1% per month on the reducing balance an APR of 12.68%. That means - if you borrow £100 and pay it back over 6 months, you'll only pay a total of £2.50 interest. Even for people with good credit ratings, this is competitive with bank loans up to £2,000.
No, there are no arrangement fees or hidden charges. You fill in a loan request form and your applicaiton is looked at by the credit committee, they make a decision and if the loan is granted it will be paid to you with no additional charges or arrangement fees.
No, you can pay off your loan more quickly than agreed by making extra payments or by fully paying off the remaining balance with no fees, or administration charges.
Yes, indeed it is. All junior accounts will be credited with 3% interest on the first £500 of their balance each year.
No, only full adult members can apply for a loan.
Credit unions are co-operatives, they are owned and run by their members. All the members are shareholders and all the benefits are for the members. Credit unions are not run to make large profits they are run to provide affordable loans to their members.
The Common Bond is the thing that gives us a shared interest in each other's well-being: ours is 'to live or work in Northumberland' by which we mean the area administered by Northumberland County Council.
The Association of British Credit Unions Ltd. is the leading trade body. Northumberland Credit Union belongs to it. It sets high standards for member unions, and gives help and advice.
The Financial Services Agency is the government's watchdog for all financial institutions, including credit unions. FSA imposes strict conditions at registration and thereafter supervises us closely with quarterly returns, inspections, audit, etc.
Northumberland Credit Union loans usually come with free life insurance cover for members up to age 70. Additionally, for members up to age 65, the insurance usually makes a payment equivalent to the value of savings - in addition to the savings being repaid.