General Enquiries: 020 7561 1786 or Email: info@credit-union.coop      |       CU Loan Repayment Issues Only: 020 3763 8397  or Email: loansupport@credit-union.coop

Credit Union Helps Mum Pay Off Huge £12,000 Debt and Develop A Savings Habit

by | May 14, 2024 | news |

Credit Union Helps Mum Pay Off Huge £12,000 Debt and Develop A Savings Habit

How A Credit Union Saver Loan was instrumental in helping a mum of 2, drowning under a debt of £12,000, to achieve financial independence.

Mum-of-two Alicia Felix, 49, fell into debt after making a credit card mistake in her younger years. She has since turned her life and finances around and is keen to make sure her daughters don’t make the same mistakes.

One of the big issues that Alicia faced at the time was the fact that credit was so readily available. She said: “Back in 2003, when I was in my late 20s, I applied for one credit card and got approved. I then applied for another and got approved again. At the time, my credit rating was so good, I was able to take out four separate cards.” In addition to this, she was able to open store accounts with three catalogue firms: Very, Argos and Littlewoods. “In retrospect, I was very naïve,” said Alicia. “But at the time, taking out credit was almost too easy. I had funds at my disposal and felt that this was money I was allowed to spend.”

Before long, Alicia found herself drowning in debt…

After contacting the Citizens Advice Bureau, they put her in touch with stepchange who organised a repayment plan with her creditors, and from there opened an account with London Capital Credit Union where she found they could offer low-cost saver loans and also provide financial education to help people build better habits.

Under guidance from the credit union, Alicia started saving. While starting to save when you have debts to clear isn’t always recommended, credit unions take a different stance on this. They often encourage members to save while paying off debts in the view this teaches good financial habits – helping people build long-term savings beyond the life of the loan.

“In the beginning, I was putting away just £7 a month,” said Alicia. “For me, this was about developing a discipline. I felt the benefit of starting to save, and this gave me something to build on.”

After a lot of hard work and patience, Alicia became totally debt-free in 2018. She still saves with the credit union today, and now has a direct debit which channels money into her savings every month. “This means I don’t have to think about it, and barely notice the cash leaving my account,” she said. Over the years, Alicia has built a healthy pot of savings.

Alicia’s tips to those in debt

hidden
Don’t stay quiet. You need to seek help

Alicia said: “I know there are so many people out there with a lot of debt. You can’t tell when people are struggling. I remember what it felt like having £12,000 of debt, and how embarrassed I felt. But you must not stay silent. It’s important to get advice.”

Reach out to a free debt organisation such as Citizens Advice, Stepchange or National Debtline

Alicia said: “There are groups that can help you consolidate your debts into one manageable monthly repayment. You need to turn to people who can guide you in making a plan.”

Be patient

Alicia said: “It can seem as though it will take forever to clear your debts, but with a plan in place, you will get there.”

Build good habits

Alicia said: “I’m keen to promote the importance of dealing with debt and building good savings habits. For me, joining a credit union has made a huge difference to my life.”

To find your nearest credit union, head to ABCUL.

Remember to ask for help

Her story comes as new research from Fair4All Finance reveals that nearly two in three people feel they are struggling with debt, yet 82% of the population keep their money worries to themselves.

Lauren Peel, director of consumer insights at Fair4All Finance. said: “It’s crucial that anyone struggling seeks support from credit unions and community finance providers – or from free debt advisers – rather than turning to loan sharks, illegal money lenders, or spiralling into problem debt.”

Elsewhere, new research from the Financial Conduct Authority (FCA) shows 7.4million people are struggling to pay bills and credit payments.

Read the Full story Here

Previous

Next

Related Posts

Volunteer graphic

It's Nice to be Appreciated

Nov 12, 2025

Planning Ahead

Oct 13, 2025

Our HomeOwner Loan Interest Rates are Reducing

Aug 29, 2025

The Jeremy Hopgood Rooms, Caxton House, 129 St John's Way, Archway, London N19 3RQ
Tel: 020 7561 1786 (Multilingual advisers available)
Email: info@credit-union.coop

If you have a loan from us and need a little help managing repayments then
please call us on 0203 763 8397 to speak with one of our friendly Loan Support Officers who will find a way to help.

© 2026 LCCU  |  Complaints  |  Privacy Policy

© 2026 LCCU  |  Complaints  |  Privacy Policy

How We Decide to Whether to Offer a Loan – The Basics

The Credit Union’s primary objective is to help members avoid or escape from debt by promoting a culture of saving. When we offer loans, we only do so if the borrower agrees to save a little while they repay. The establishment of a savings habit is proven to reduce the harms and risks of long-term borrowing becoming problem debt. Basically, when we get a loan application our decision is based on the following two principles:

1. Do we trust the applicant to repay the loan?

2. Can the applicant afford the loan repayment

This guide is designed to help members understand our thinking so you can best prepare if you should need to apply or re-apply for a loan.

1. Key Points in Our Assessing Trust of the Applicant

a) Has the applicant started saving? The money we lend is members savings so, especially at busy times, we have to give priority to loan applications from members who have made at least one savings payment. That first payment is good evidence that you are a real person and helps us confirm identity.

b) Proper Proof of ID & Address? What forms of proof of identity and address has the member provided? If you are able to connect your bank account through ‘open banking as art of the loan application process it a good way of proving ID. First time loans may be required to use online Open Banking.

c) Previous Borrowing History. Has the applicant borrowed and repaid us previously? Previous good repayment record supports any application.

d) Did the applicant inform us of other money owed? Failure to list all debts in the application process is likely to result in the loan application not being approved. It suggests that the applicant is either not in control of their money or not being completely honest with us and in either case we cannot put our members savings at risk by lending. Credit Reference Agency checks are used to show us what money is owed and to whom.

e) Is the member sensible with money? When we review the bank transactions of the loan applicant, we often see patterns of expenditure that suggest the applicant is not taking a sensible approach to expenditure. Changes in the way they manage their finances would suggest that the loan would not really be necessary. We want to help people be in control their finances and do not want to lend members savings to people who are not deemed sensible with the way they spend. This may be things like gambling, excessive shopping and/or eating out/takeaway food deliveries.

f) Always be ‘up front’ in your application. Honesty pays. We do not judge.

2. Key Points in Our Assessing Affordability for the Applicant

a) Is this loan in the member’s best interest? The value of the loan application in comparison with your income is a key measure of affordability. The loan interest members pay on loans pays our staff salaries, but we are not out to profit from you, rather we want members to borrow less over time and take control of their finances.

b) Positive Bank Balance at Month End? Is there money left in the members bank account at the end of the month that would be sufficient to cover the loan repayment if approved? If not, the member must explain how the loan would become affordable, for instance, by reducing expenditure in other areas.

c) Is the applicant struggling with existing debts? When we review the bank transactions of the applicant we can see income and expenditure. If the loan applicant tells us how the loan will clear other debts and reduce their expenditure this will help us understand affordability.

d) Is the purpose of the loan considered sensible? If the applicant is not paying essential bills such as mortgage or rent then a loan for a car or holiday is likely to be unwise and unaffordable.

e) Has the applicant fully explained why they need to borrow? Always feel free to email or call us explaining the circumstances that mean you need to borrow. The reasons for needing to borrow are complex, but being honest and explaining the circumstances can often help the ordinary humans on the Loans Team at the Credit Union to be able to assess trust and affordability. You briefly explaining your thinking about affordability gives us confidence that you are thinking sensibly about money, and sometimes allows us to suggest alternatives that may well be in your best interest.

f) Is the loan to clear other more expensive debts? Credit Reference Agency checks are used to show us what money is owed and to whom. If your loan application is to pay off other debts, stop and list every one of those debtors.Work out the cost of each. Consider clearing one or two at a time if its your first Credit Union loan. Pick them off one or two at a time, the most expensive first.

g) Has the applicant stopped to think about affordability? The ‘Your Money’ section of our website provides access to a budget planner which, if used and shared, gives us good evidence of affordability. Particularly helpful for loan applicants in financial stress. We hope this gives you an idea of how we decide yes or no to loan applications. The decision is by one or more other credit union members on our Loans Panel. We hope this helps you understand our thinking so you can best prepare if you should need to apply or re-apply for a loan.