Loans - Frequently Asked Questions
Q:When can I start to borrow?
A: New members are expected to save regularly for 12 weeks before applying for a first loan. If the amount of loan is less that your savings (secured loan) then the loan may be granted immediately. Important You will be given a loan interview where you will be assisted to fill in a loan application form. This application must include details of the amount you wish to borrow, a full list of all income and expenditure and a realistic repayment schedule. You may be asked to provide additional information to the Credit Committee to help them make a decision on your application.
Q:How much can I borrow?
A: This depends on your savings record at the time of application, the current loan policy and your ability to repay the loan applied for.
Q:What would the repayments be?
A: This is decided on an individual basis depending on the amount borrowed, the ability to repay and within current legal limits on maximum repayment periods.
Q:How long will I have to wait?
A: Applications for loans are normally held on Tuesday’s and Thursday’s each week. Always apply in good time especially at busy periods i.e. Christmas and Summer Holidays.
Q:Am I guaranteed to get a loan?
A: No. All loans are granted at the discretion of the Credit Committee who operates under the Loan Policy set by the Board of Directors.
Q:Why would I be refused a loan?
A: There are various reasons why your loan can be refused/reduced. Your loan may be refused/reduced if the Committee feel that your income/expenditure does not allow you the surplus to repay the loan, or if you have shown irregular savings and loan repayment patterns or if the Committee feel that you have share loaded before applying for the loan. Credit Unions are about people. Most loans are granted in TRUST. Your reputation is an important factor. Important The Credit Committee will always take into account the member’s loan history and their savings record with the Credit Union before a decision is taken on any loan.
Q:What is shareholding?
A: When a member deposits large sum that are outwith their normal pay-in schedule, especially just before applying for a loan. This would be shareholding for the purpose of obtaining a loan. Important These payments will be held in the members’ account for at least six weeks before they are taken into consideration for the loan.
Q:What happens if I can’t keep up the repayment?
A: A Credit Union belongs to its members. If you experience difficulty, the Credit Union is here to help. Tell the Credit Committee of your problem and they can assist you by renegotiating your repayments. Important Do not ignore any arrears letters. The Board of Directors has responsibility to protect all members’ money and they will use the services of a debt collector and court proceedings to recover any debts.
Q:Is there a maximum amount I can borrow?
A: Once you have built up your record and history of repaying loans promptly and you have saved regularly with us then you can borrow the amount allowed by our current loan policy.
Q:Can I save while I pay off my loan?
A: Yes. You must continue to save whilst repaying your loans as it builds up your savings for future borrowing, your dividend is increased and it protects your life savings. Important Credit Union savings are used by members to access borrowing.
Q:Can I withdraw my savings while repaying a loan?
A: Credit Union rules state that you can only withdraw your savings while repaying a loan if your share balance exceeds your loan balance but you can only withdraw the difference. Your shares are used as security against any loan and sufficient funds must stay in your account to cover the loan. When you save with the Credit Union your shares are used by other members to borrow and we need to ensure that adequate funds are available that allows all members the opportunity to borrow.
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