How To ApplyCredit Union Loans
How To Apply
Your credit union will consider loan applications from members for any worthwhile purpose. Each application is treated with the utmost confidence and will be considered on its own merits. It is credit union policy to meet the borrowing requirements of as many members as possible, so, depending on the available funds, a number of smaller loans may be given priority over a single large loan.
Applications for loans are made on a standard loan application form. Loan applications will then be considered by the loan officer or credit committee.
In deciding whether or not to grant the loan, the committee or loan officer will take into account the member's record of savings and repayments as well as ability to repay and need. Once the loan is granted, the member will be asked to complete a promissory note (which is a legally binding document being a promise to repay the loan) and to commit to regular repayments. Remember - only members are eligible to receive loans from your credit union.
Planning And Managing Repayments
Credit unions are flexible in regard to repayment plans though there are some legal limitations to length and amount of loans. Members are generally advised to repay a loan in as short a time as possible. Should a member experience difficulties in meeting repayment commitments he/she should immediately explain the situation to the credit union which will treat the matter sympathetically and in total confidence. Depending on the circumstances, the loan will be renegotiated if possible.
Interest On Credit Union Loans
"Truth in Lending", with no hidden costs is the policy of the credit union movement.
By law a credit union cannot charge more than 1% per month on the reducing balance of a loan. This represents 12.68% APR (annual percentage rate). Credit Unions do not charge fees or transaction costs. Some credit unions may choose to charge even less than this 1% per month. Since the interest is charged only on the outstanding balance of the loan, you will pay less if you repay in a shorter time than planned. Thus the credit union gives you control of your own finances, even when you are a borrower.
Loan Protection Insurance
Everyone is nowadays advised to take out insurance to cover outstanding loans in case of death or permanent disability. In credit unions the savings and loan balances of all eligible members are automatically covered (up to certain limits) at no extra cost to the member. This means that you can borrow in the full confidence that your dependents will be protected against this debt in these extreme circumstances. There are added advantages to this insurance and some special conditions.
Saving While Repaying
Members are encouraged to continue saving at all times even when repaying a loan. Remember that even the smallest amount save regularly grows quickly and that your savings and loan will be doubly protected by insurance. Savings not only help build up your own fund but also contribute to the credit union's fund. "What I save today may help you borrow tomorrow."
Advantages Of Borrowing With A Credit Union
When you receive a loan from your credit union you will find many advantages in comparison to other institutions:
Your loan application will be dealt with strictly on its own merits. Your repayments will be tailored to meet your own personal circumstances
Your loan (up to certatin limits) will be insured at no direct cost to yourself
The interest rate you pay will be reasonable and interest will be payable on the REDUCING balance of the loan. The repayment schedule can be adjusted to meet your own changing circumstances if necessary.
In order to facilitate members who are unable to visit the Credit Union during working hours, you can now apply for a loan online.
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