Enjoy:

• No hidden charges or penalties for early repayment
• Confidence that the interest rate will not increase
• Loan protection insurance in the event of death at no additional cost
• Optional payment protection cover at competitive rates against uncertainties such as redundancy, illness or accidents
• Negotiable repayment terms

In the past we used the age old system of loans based on two or three times the amount held in the saver plus account however we revised our loan policies in 2004/5 and members are now able to qualify for loans based on their ability to repay, and management of financial obligations however we are still constrained in the value we could offer in accordance with law and FSA guidelines which stands at £5,000 above the balance in your saver plus account. The Credit Union is in the process of implementing the necessary safeguards and reserves to allow us to provide loans up to £10,000 above the balance in the saver plus account.

FREE LOAN INSURANCE FOR ALL!

When you take a loan at your credit union we pay to protect your loan and therefore in the event of your death (quite apart from the fact that we either doubling or tripling your savings) we repay your loan in full up to a maximum of £5,000 (this will increase as average loan balance increases). This is part of the Credit Union advantage…the loan dies with the debtor This means your finances are in order and there is no additional financial burden on your family.

SECURED LOANS

The changes in law and the guidelines of the Financial Services Authority now make it possible for Credit Unions to offer secured loans with repayment terms of up to 84 months. The average APR could vary but the maximum will be 12.68%. Secured and unsecured loans will however both enjoy the same advantages of no hidden costs and no penalties for early repayment. Interest is also charged monthly on the unpaid part of the loan and not on the full loan.

UNSECURED LOANS

Most banks will not offer a loan to those who are unemployed or on low income or those with prior bad credit history however at the Credit Union there is no discrimination in the loan approval process. The process involves an analysis of each individual loan and the circumstances. Prior adverse credit history would not mean you pay a higher rate of interest since all members pay the same low rate of interest on loans. The normal rate is 12.68% apr however if you obtain a loan of £1,000 and repay this over 12 months the actual interest payment over the entire 12 month period is less than £66.00 so the actual rate of interest paid is approx 6.6%. It is a fact that the rate of interest charged by the CU on loans below £2,500 is probably the cheapest you would find anywhere and if we add our payment protection insurance rates, which are the most reasonable on the market, you are sure to pay less for a loan at the Credit Union. Unsecured loans can be taken for a period not exceeding 36 months and again the loan is based on ability to repay and management of financial obligations. Maximum loan allowed is currently £5,000 above balance in saver plus account but we are reviewing this with a view to increasing this to £10,000 above the balance in the saver plus account.

EDUCATIONAL

Preferential rates of interest may be considered in certain circumstances for loans for educational purposes.

ISLAMIC

Islamic finance is an ethical, indigenous and equitable mode of finance, which derives its principles from the and tradition of the Prophet Muhammad (pbuh). Shariah law (Islamic law), which is based on the Quran and Sunnah, governs Islamic finance.

Islamic Finance as a concept is based on themes of Community Banking, Ethical and Socially Responsible Investments and Affinity Marketing. These themes themselves are based on core ideas, which include individual responsibility, reliance on market mechanism, commitment to economic and social justice and mandatory care for the environment. In Islamic Finance Scholars say that everything is allowed except that which has been specifically forbidden. In essence the believing Muslims view of economics is based on Man's obligation to organise his affairs in accordance to the will of God as his representative and vice regent on Earth. The goal is not equality but an avoidance of gross inequality along with an injunction that wealth should not become "a commodity between the rich among you". Islamic Finance is firmly embedded in the commercial, real, value-producing economy.

The credit union is currently investigating the prospect of offering an Islamic type loan based on Shariah law. This has been successfully done by a few Credit Unions overseas and the option is to link this to the Islamic Saver account. At present the payment of a dividend on the saver plus account conforms to Islamic ideals since it is not an interest payment however although Credit Unions loans are not granted to make a profit but to service the operating cost and pay a return to members most Muslims are able to participate in the product. Notwithstanding a loan which incorporates the teachings and conform to traditions and law will be a valuable extension of our work and this is being aggressively considered.

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