MCCU -Existing member Loan Account

Once you have been saving for 13 weeks if saving weekly, or 3 months if saving monthly, you may be eligible to apply for a loan at preferential rates.

Because we know more about your finances, and as long as you can commit to maintain savings equivalent to one third of your outstanding loan, we are able to charge a preferential interest rate of only 1% per month on the outstanding balance of your loan.

Examples:

Loan amount	Repayment period	Weekly repayment	Total Interest	Monthly repayment	Total Interest	Savings needed
£100	One year	2.04	6.71	9.06	6.43	£33.33
£500	Two years	5.48	64.69	23.55	64.70	£166.66
£2,000	Three years	15.34	393.02	66.46	391.00	£666.66
£5,000	Five years	51.37	3,350.84	222.48	3345.51	£1,666.66

If you would like an indication of the likely repayment for a loan you are thinking of applying for, the ABCUL website has a loan calculator.

So that customers can compare one lender with another, all licenced lenders are required to state their Annual Percentage Rate (APR), which is a standardised calculation taking into account all interest, fees and charges which apply to the loan.

Our APR is 12.7%, which compares very favourably with other lenders of small loans. For example, a prominent alternative lender typically charges an APR of 177%. A loan of £500 over 104 weeks from this company would typically require a weekly repayment of £11.38. You would repay a total of £1,180, whereas a loan from the Credit Union would have cost only £5.48 per week and have total repayments of only £565, so with us you would pay £615 less over the life of the loan.

We will ask you for fill in an application form containing information about your financial circumstances. We will require documentary proof of your income such as payslips or bank statements. If this is your first loan, we may decide to take out a credit report, for which the fee would be £10, which can be paid in advance or added to the loan.

We have a Credit Committee who will decide whether to approve your application. The Credit Committee meets weekly, but If your need is more urgent, we may be able to make reach a decision more quickly. Loans approved will normally be available for collection from the next day that we are open.

Loans are granted on the basis of your savings record, your capacity to repay and according to the Loans Policy of the Credit Union. The maximum loan we are allowed to offer is £25,000, which would require savings of £10,000.

Repayments can be made at local collection points, by Standing Order or, if your employer runs this scheme, by payroll deduction. The repayment period can be as long as 5 years and is negotiated with you to meet your own capabilities and the purpose of the loan.

You will be required to sign a legally binding agreement. Loans are funded by other members' savings, so failure to repay would lead to legal action being taken against you.

We take out insurance to repay the loan in the event of your death, all at no extra cost to you

There are no hidden fees or costs involved in transactions with the Credit Union. No penalty is charged for early repayment.

Loan Application forms are available for download here or from any branch.

To start the application process, you will need to bring the form into a branch together with proof of your income.