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Frequently Asked Questions
What is a credit union?
Credit unions are not-for-profit, member-owned, financial co-operatives that exist for the benefit of a group of members who share a common bond, such as where they work or live. It is London Mutual Credit Union’s mission to provide our members with access to reasonably priced financial services and encourage the development of good financial practice.
How is a credit union different to a bank?
The biggest difference between credit unions and banks is the member’s ownership or involvement in the institution.
While you think this may not affect you, it actually does. Credit unions are not-for-profit organisations owned by their customers, who are called “members.” As a member and owner, you are given the opportunity to gain greater control over your finances. Banks are for-profit corporations, with declared earnings paid to stockholders only.
What is involved in becoming a member?
As a member of the credit union, you own part of the credit union through your shares. The members own, control, and administer the Society (the credit union). Because you are a member and partial owner, the credit union works for you. Therefore, as a member of the credit union you will have access to ethical and affordable loans and more financial advice as to which loan product is best for you.
What does it mean to having savings with the credit union?
This means that not only do you have more control over your money, but also, as a shareholder, you will receive a dividend on your Membership Account whenever the company is making a profit.
What makes you ethical?
Credit unions strive to offer fair, competitive financial services to individuals from all walks of life, regardless of their social status and economic background. Additionally, we believe that borrowing money should be a carefully thought through process, and the way we lend is built around your ability to repay. Our dedicated employees want to work with you personally to create a repayment plan that best fits your situation.
Who can apply for a loan?
Only the members. As long as you are a member, you can apply via online or complete the paper application at one of our three branch offices.
What is a current account?
A current account is a bank account that allows you to access a range of banking services, such as receiving money (like your salary, pension or benefits payments), paying bills, and setting up direct debits and standing orders to make regular payments.
Our current account can be very useful for anyone looking for an easier, more affordable way to spend and access their funds. Opening a current account provides members with a MasterCard Debit card and allows access to their accounts from over 70,000 Link ATMs across the UK and our MasterCard is widely accepted throughout the world wherever you see the MasterCard sign.
How secure is my money?
The credit union, like banks and building societies, is regulated by the Financial Conduct Authority (FCA) and authorised by the Prudential Regulation Authority (PRA). Savers’ deposits are protected by the same Financial Services Compensation Scheme that covers banks and building societies. An eligible depositor is entitled to claim up to £85,000.
How are credit unions so affordable?
Credit unions do not have shareholders to pay, as our members are our shareholders. By law, the maximum interest rate that a credit union can charge its members for a loan is 3% per month or 42.6% APR. We are also very proud of our affordable CUOK payday loan service. The interest rate on a CUOK loan is much lower than that charged on typical payday loans, so taking out a CUOK loan saves you money and makes good financial sense.