The big High Street lenders might seem like the only place to borrow money, but could your local Credit Union be a better alternative?
Banks are big businesses, of course. That means they need to make big profits to keep their investors and shareholders happy. And that means that unless you’ve got a squeaky clean credit record with lots of good borrowing history you’re not going to get their best deal, and maybe no deal at all. It’s this approach that has seen the rise of the “payday” loans industry, with their eye-watering interest rates of up to 1,500% APR.
If the big banks aren’t interested lending to you then there is a better alternative to the payday lenders with their glossy TV ads – it’s time to check out your local Credit Union.
The My Community Bank Network of credit unions means we have most of the country covered, we want to help as many people as we can so we took our credit unions digital!
As the name implies, a Credit Union is a coming together of people to pool savings to allow local people to access credit at sensible rates of interest, even if they’ve got a few bumps in the road on their credit history.
Credit unions are not run for profit and have no shareholders – everyone who borrows or saves is a member, and they all have a right to share in any surplus the union makes, this is shared out as a dividend rather than a traditional savings interest rate.
For borrowers, the lack of shareholders demanding fat profits means that people with less than ideal circumstances are more likely to be accepted for a loan, and the interest rates you pay are much lower than the payday companies. Credit unions also pride themselves on their ethical stance of looking out for their members, so they’ll never encourage you to borrow more than you can afford, or to roll over loans.