Members of the Credit union who are of full age (18 years or above) may apply for a loan for a provident or productive purpose. All loans are provided from the savings of other members.
Loan applications may be made at any time during normal office hours or 24/7 online. Please note online loan applications are assessed during office hours. A guarantor may be required.
Typical Loan Example
|£1000.00 repayable over one year with 52 weekly repayments of £20.43 (includes interest).|
|Total loan amount:||£1,000.00|
Total interest payable:(Approximately 6%, based on interest being charged on the reducing balance. APR = 12.73%)
Total amount to be repaid:
- As a not for profit organsiation, any surplus income not required to meet regulatory obligations and/or operating costs is returned to the member through dividend and loan interest rebate. Therefore, you may also benefit from a loan interest rebate at the end of each year, thus further reducing the overall interest you pay.
- Payments are arranged to suit your circumstances.
- There are no transaction fees or penalties for early repayments.
- Secure online loan applications via the members area of the website.
All loan applications are subject to approval and the Credit Union’s lending terms & conditions. Typical decisions within 24 hours from receipt of all required information.
Legislation requires that unsecured loans must be repaid within 5 years. (This period may be increased by future changes in legislation).
Members may be eligible to borrower immediately upon joining Pennyburn Credit Union. The following are some of the factors taken into account when considering a loan application:
- > The member’s ability to repay
- > The purpose of the loan
- > A regular pattern of savings
- > The member’s previous loan repayment record
- > Frequency of loan applications
Every loan request receives careful consideration and c94% of applications (as at financial year ending 30/09/2020) are approved. However, in the best interests of the Credit Union and indeed of the member concerned, some loans are refused.
It should be noted that the Credit Union is not required to state the reason for refusing to grant a loan. It should also be noted that loan applications are considered by the Loans Committee and counter staff are not involved in such decisions.
While the present legal term for loan repayment is 5 years, there are certain loans which are regarded as Annual loans, eg. Holidays, Christmas, Car Tax, Insurance, Rates etc. Such loans should be fully paid within 12 months.
Before any loan is paid out, the member and where applicable the guarantor, is required to sign a PROMISSORY NOTE. This is a legal document whereby the member (and if applicable the guarantor) promise to repay the loan and interest at a stated rate of repayment.
Where the amount of shares/savings at the time of loan draw down are equal to or less than the loan amount, those shares /savings become pledged as security for the loan and may not be withdrawn. It is the policy of Pennyburn Credit Union that any money saved after the loan is granted may be withdrawn if the loan is not in arrears.
There may be times when, for genuine reasons or unexpected circumstances, a member finds difficulty in maintaining the promised repayments. If this happens it is essential that the member contacts the office immediately. Any delay will make the situation worse and it will become harder to make a new repayment arrangement. Our Credit Control Officers are always available to discuss loan account problems.