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

Our HomeOwner Loan Interest Rates are Reducing

by lccu2020 | Aug 29, 2025 | news |

Our HomeOwner Loan Interest Rates are Reducing

Our HomeOwner Loan Interest Rates are Reducing

Owning your own home can bring some large demands on your finances so we offer ways to spread the costs of home improvements, loft extensions, new kitchens, bathrooms or major works projects for leaseholders and shared ownerships. Our Homeowner Loans range from £7,000 up to £40,000 and with the introduction of risk-based pricing, many will now be reducing in price by up to 2%, particularly for those using a Salary Savings & Loans Scheme as repayment the method. Our interest rates offered on this loan product can range from just 2.9%apr to a maximum of 9.9%.

We guarantee a HomeOwner Loan at a 0.1% discount to any eligible member with a loan offer confirmation above 3%apr dated within the last three months. It pays to shop around, and beware as with others, advertised rates are often not what is offered when you come to apply.

If you are a homeowner and your bank offers you a loan talk to us, as we are likely to be able to beat it on price and you will end up with a sizeable lump sum of savings once the loan is repaid. It is a co-operative thing, here to help.

London Capital’s Homeowner Loans have also contributed to the lending boost, with more borrowers taking advantage of the product’s commitment to beat any bank offer on loans from £7,000 to £40,000 – often used to fund large-scale home improvements.

The credit union’s recent annual membership survey reveals further insight into its social impact. Almost half of respondents said they had no savings at all before joining, with the credit union providing a critical foundation for long-term financial wellbeing. Member satisfaction remains high, with an average score of 9.0 out of 10 – another year on year improvement.

Martin added: “We know that this is a significant achievement and is a credit to our staff and volunteer team. High levels of member satisfaction continue to be the most effective method of driving membership recruitment and are core to our objectives as a member-owned co-operative.”

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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.

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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.

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