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What is a Credit Union and What are the Benefits?

A Credit Union is a small non-profit financial organisation created with a common aim to aid the local community.

There are numerous types of Credit Unions which can cover a variety of professional sectors. Many Unions have now transformed in the digital age and offer collecting savings, product and services, current accounts, mortgages and regulated online loan offerings.

In June last year, there were about 305 credit unions in England, Scotland and Wales, with almost 1.3m members.” – Money Saving Expert

How Do I Join a Credit Union?

If you’re thinking of joining a Credit Union, firstly, you will have to check if you are eligible. Credit Unions are distinct but to be eligible to join a specific union you will need to have a ‘common bond’ with other members.

We know how it sounds, but no this isn’t a secret organisation like the Free Masons, all this ‘common bond’ refers to is a bond and similar interest. So, some examples of a ‘common bond’ could be  a Geographical bond – we’re Reading Credit Union, so our Union is for anyone within the Reading area.

Other bonds could be a ‘Professional Bond’ this bond type refers to major transport companies such as Arriva or Virgin. An ‘interest bond’ could be applicable to who live with a London Borough, or part of an association concerned with the finance, culture, cuisine or Welfare of the South Asian Community within the UK. You kind more information regarding ‘interest bonds’ here: https://www.communitybanknetwork.co.uk/

Credit Unions are Non-Profit Organisations

Credit unions are not set up for profit. The main aim to help members to take control of their finances. For example, they typically encourage users to save what is affordable and only borrow what is affordable based on your own personal finances. 

How Credit Unions Work..

Credit Unions work essentially as savings and loan co-operatives, meaning Union members pool together their savings and lend to one another and in doing so help to run the Credit Union.

Credit Unions offer savings and loans, some can also offer current accounts and mortgages but this is subjective to the Union involved.

Are You Eligible?

So far, so good? Wondering how you can be a part of Union near you? You can check your eligibility for membership to a Credit Union online.

The Association of British Credit Unions Limited (ABCUL) has a Find Your Credit Union website, which does precisely that. All you need to do is search by your postcode, enter your employment type, or any other organisation that you think may have a union. You can call ABCUL on 0161 832 3694 if you have restricted internet access or prefer to check via telephone as opposed to online.

Disclaimer: This is not financial advice, please review your own personal situation and consider if a Credit Union is right for you. We do not deal with the solvency of companies, this site always aims to give accurate information, but we do not take any liability if we have miscommunicated any information on with website by error. Our content writer work voluntary and are not regulated. We may link towards other websites but cannot be held responsible for their content. We aim to provide the best information that we can but we are only as good as our resources.

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