Credit unions are community organisations run by and for their members.
Key features of a credit union are:
- People who save or borrow through one must live in the same area, work for the same employer or have the same profession
- Credit unions are run on a ‘not for profit’ basis, so instead of paying a profit to shareholders, they use the money they make to reward their members and improve services
- They are regulated by the Prudential Regulatory Authority and the Financial Conduct Authority. The FSCS savings protection limit for consumers is £85,000. If you have more money than the limit, some of your money will be at risk if your bank, building society or credit union fails.
Why go to a credit union?
Credit unions operate with three main aims:
- To provide loans at low rates
- To encourage all members to save regularly
- To help members in need of financial advice and assistance.
There’s a cap on the amount of interest they can charge on their loans of 3% a month or 42.6% a year APR.
Find your local credit union here, and for more information, take a look at the three great videos below.