What is a credit union?
What does ‘credit union’ mean?
A credit union is one alternative to banks or other forms of borrowing. It’s a not-for-profit organisation that’s typically run by its members. The members usually share some sort of bond – for example, they may live in the same area or work at the same place. They pool together to lend money to each other. Credit unions in the UK are regulated by the Prudential Regulatory Authority (PRA) and the Financial Conduct Authority (FCA).
How does a credit union work?
Credit unions are co-operative organisations that act in the interests of its members. They tend to encourage members to save regularly and only borrow what they can repay.
Do credit unions offer loans and mortgages?
Credit unions provide services related to loans and savings. Some also offer current accounts and mortgages.
Can you apply to join a credit union with bad credit?
You might be able to join a credit union if you’ve got bad credit. There are other requirements you may need to meet as well in order to be a member.
Can you get a credit union loan with bad credit?
Some credit unions could potentially lend you money even if you have bad credit. They may require that you start saving with them first, though.
How much can I borrow?
It varies according to the credit union, but they can offer small loans, while high street banks may not.
Getting a credit union loan
Some credit unions will need you to start saving with them before you can apply for a loan. There are usually no hidden charges, nor fees for early repayment. They typically provide free life insurance at no extra cost when you take out a loan with them, so that the loan is considered repaid if you die.
Some credit unions use credit reference agencies as part of their vetting process. So if you apply for this type of loan, it may show up as a credit search footprint on your credit report.
How can I join a credit union?
One way to check if by using the Association of British Credit Unions Limited (ABCUL)’s Find Your Credit Union website.
- Guide to student overdrafts
- Guide to student credit cards
- What is a credit blacklist?
- What are 0% interest credit cards?
- Moving to the UK and your credit score
- Who can see your credit report?
- Should you lease or buy your next car?
- Student loan repayments
- Balance transfers explained
- Credit cards and minimum repayments
- Financial association explained
- Getting a mobile phone contract with bad credit
- Why have I been refused a credit card?
- Why do people use vehicle refinancing?
- What does my credit score say about me?
- What to do if you've missed payments
- New interest rates for savers and borrowers
- How to maintain a good credit score
- Can you achieve the highest credit score?
- Can you pay off loans early or late – or take a payment holiday?
- Infographic: Back to basics – how do credit reports and scores work?
- What happens to credit history when moving abroad
- Credit checks for renting
- Understanding credit score ranges
- Divorce and your credit score
- How credit cards work – how they may affect your credit rating
- Students and credit reports
- Credit agreements – the basics
- Different types of credit card
- Death and credit reports
- Newlyweds, financial planning and credit
- Getting credit cards with bad credit history
- What is a guarantor and how do they work?
- Explaining compound interest
- How Credit Scores Affect Car Finance
- How can I improve my credit score?
- Getting credit with no credit history
- Soft credit searches explained
- What to consider when applying for credit cards
- What is a credit rating?
- What types of credit can you get?
- Staying on the electoral register when moving
- The Electoral Register and How It Influences Credit Scores
- 7 types of credit provider
- Credit: Why do People Use it?
- Credit Myths - The truth about Credit
- Interest Rate Types
- Credit Hygiene
- Which factors affect credit scores??
- Your Credit Limits: Do’s & Don’ts
- Secured Vs Unsecured Loans
- Joint Liability - Everything You Need to Know