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

Could you support our team of volunteers?

The Credit Union welcomes donations to support our volunteers who play an important role helping to prevent problem debt and dealing with the consequences of debt and poverty in our communities.

Our large and growing team of volunteers is key to the Credit Union being able to deliver low cost financial services to those in need. Our volunteers are members who are seeking paid work and want to stay active, gain new skills and help others in the process.

As well as office duties, volunteers carry out a wide range of roles, from workplace and community champions to membership of the board of directors. Without our volunteers we could not keep growing and meeting the needs of people desperate to move away from borrowing and into financial stability.

It is important to us at the Credit Union that we are able to pay out of pocket expenses to those who give up their time as volunteers to help the Credit Union. In order to pay for travel, out of pocket lunch expenses and the costs of training, we are seeking financial donations.

Often our volunteers are recovering from illness or have come to this country to escape civil war or famine in their home country and want to ‘give something back’ to the country that has given them a safe home. We offer friendly support to improve written and spoken English, a wide range of work experience, and we help people rebuild their confidence and improve their CVs so they can get back into paid work. We are very successful in getting our volunteers into paid jobs by improving skills and boosting self-confidence.

The Credit Union is not registered as a charity, because it sells services, however it is widely considered that our aims and objectives are broadly ‘charitable’. Our social objectives include contributing towards the alleviation of poverty within the community and contributing towards the economic regeneration of the community.

We achieve this, for example, by promoting thrift among our members through the accumulation of savings, by creating sources of credit for members at fair and reasonable rates of interest, and through the training and education of members in the wise use of money and in the management of their financial affairs.

Martin Groombridge, Credit Union Chief Executive, said: “We rely on our volunteers for the day-to-day running of our Credit Union and they play a vital role in providing support to some of the most vulnerable in our communities. By donating to us, you can help us provide work experience and opportunities to people who want to give something back to their community, whilst also enabling us to deliver fair and affordable financial services to those who need it most. We are grateful for donations large or small.”

Click here to find out more about our Volunteer Support Programme and to donate.

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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.