What is a credit union?

What makes credit unions different to other financial institutions?

Credit unions are membership-based organisations, offering an ethical alternative to traditional financial institutions for saving and borrowing. Sounds great right? But credit unions carry many misconceptions as to what they are.

Below are some of the advantages of using a credit union and how they are helping support people during these times of difficulty.

Advantages of being a member of a credit union

  • Credit unions are known as an ethical alternative to other financial institutions. As not-for-profit organisations, credit unions are driven by profit driven, but focussed on improving the range of products and services provided to its members.

  • Often, credit unions offer better rates than the high street, and generally do not incur set-up fees, admin costs or early repayment penalties. In fact, many credit unions in the UK offer free life cover on their loans, giving borrowers peace of mind.

  • An appeal of credit unions is their willingness to offer small loans, which many highstreet banks would not do. Serve & Protect provide loans repaid via salary deduction from £500 to £3,000 at a rate of 13.5%, offering a far cheaper option to payday lenders.

  • The return on savings with a credit union comes in the form of an annual dividend, rather than an interest rate. The dividend is dependent on the profits of the credit union. Serve & Protect paid a 1% return on savings in the 2019-20 financial year.

Here to help you save, there if you need to borrow

To find out more about Serve & Protect and how you can become a
member, visit: www.serveandprotectcu.co.uk

  • The information provided in this article is for guidance and educational purposes only. Police Credit Union Ltd. does not offer regulated financial advice. Please seek independent financial advice.

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