How to repay a small credit union loan with benefit payments
Credit Unions across Wales offer their members a variety of small loans which can be repaid directly through their Child Benefit payments.
The ethical savings and loans providers allow members to borrow small, affordable amounts up to £500 to cover their essential financial outlays.
The loan not only allows repayments to be directly from their benefit, but members can also pay some of the benefit into a savings account for the future.
Credit Unions introduced the loan schemes to offer people a more responsible alternative to doorstep lenders and high cost credit providers.
Claire Savage, Policy Officer for Credit Unions of Wales said: “Unlike unscrupulous payday lenders. credit unions are committed to the financial welfare of their members and will only offer affordable loans to those who they believe can adequately repay them.
“That means members are not treated as a credit score and despite being turned away for a loan from other high street institutions, may still be able to borrow from a credit union.
“This type of loan is ideal for parents with children because family life can be expensive, whether it’s school uniforms and trips, birthdays or Christmas.
“This loan scheme bridges the financial gap to help people take out a manageable loan while also having an opportunity to put the remaining money aside for their children’s future.”
Each time a Child Benefit payment is made, a percentage is used to pay off the existing credit union loan and the remainder can be saved into an adult or children’s account or returned to the member.
As social enterprises with no external shareholders, credit unions are able to offer loans at very competitive rates of interest
Interest is charged on the reducing balance of the loan, there’s no hidden charges or penalties for paying the loan early and you receive free life insurance.
Contact your nearest credit union and find out how they can assist you by visiting our website today.