The Credit Union will consider loan applications from members for any worthwhile purpose. Each application is treated in the utmost confidence and will be considered on its own merits. It is credit union policy to meet the borrowing requirements of as many members as possible, depending on the available funds.
Applications for loans are made on a standard loan application form. Loans can be applied for by post or by calling to our office. Our staff will give you any assistance required. Loans will then be considered by a Loan Officer or by our Credit Committee.
Credit union loans
For full details of Penny Post Credit Union loans please see our leaflet, ’Thinking about a Credit Union loan?’. The terms and conditions of Penny Post Credit Union loans are printed on our ’Credit Union Loan Terms & Conditions’ leaflet.
Remember - only members are eligible to apply for credit union loans.
Planning and managing repayments
Credit unions are flexible with regard to repayment plans, though there are some legal limitations to length and amount of loans. The member will be advised on the best repayment plan to meet their own circumstances. Members are generally advised to repay a loan in as short a time as possible. 5 years is currently the maximum loan term. Should a member experience difficulties in meeting repayment commitments, they should immediately explain the situation to the credit union, which will treat the matter sympathetically and in total confidence. Depending on circumstances, the loan will be renegotiated if possible.
Penny Post Credit Union loans
Penny Post Credit Union offers members a choice of three types of loans each with its own terms and conditions.
- Unattached Loan; With an 'Unattached Loan' the loan is not connected (attached) to your savings. There is no minimum amount and the maximum is £5,000. Interest on the loan is charged at 2% of the remaining loan balance at the end of each calendar month (26.8% apr).
- Attached Loan; The 'Attached Loan' has an interest rate of 1% at the end of each calendar month (12.7% apr) for loans up to £5,000. For Attached Loans from £5,000 up to £8,000 there is a lower interest rate of 0.93% of the outstanding loan balance at the end of each month (11.7% apr). With this loan you can apply for up to four times your savings. You will need to keep at least one quarter of the amount of your outstanding loan balance in your savings throughout the loan.
- Secured Loan; With a 'Secured Loan' at least the same amount as the outstanding loan is kept in members savings. The interest rate is 0.63% per calendar month (8% apr). The maximum amount is £8,000.
Credit unions do not charge fees or transaction charges. Since the interest is charged monthly, and only on the outstanding balance of the loan, you will pay even less if you repay in a shorter time than planned.
There are no penalties associated with paying off your loan quicker than agreed, in fact, you will save on the interest originally payable on the loan!
First Year of Membership
After six weeks saving and during the first year of membership, members can apply for a loan up to £2,000. The maximum loan we can offer thereafter is £8,000.
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05 September 2010
Download Thinking about a Credit Union Loan (1289.7kb)