It is quite easy to believe right now that there are no other choices because the standard means of having credit has become so basic that being at the mercy of increasing interest rates and inflated charges on loans and credit cards has become so basic too. But there may be an alternative in the form of the little known credit union movement.
A credit union is being run by its members which serves as a profit sharing and financial co – operative. Statistics also shows that the popularity of the credit union movement in the UK is continuously increasing since the union itself offers a more financially attractive alternative to the standard products offered by the banks.
However, you have to keep in mind that maximizing profits is not the main goal for a credit union.
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The first goal of a credit union is to help its members save money.
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To provide loans and financial assistance to its members at the lowest rates of interest possible.
Another goal of the credit union is that, the management of the financial affairs of the members should help and support them in times of need.
Last but not the least, being a member will let you take the best benefits that the credit union can offer.
The key to becoming a member of a credit union is what is known as the ‘common bond’. The common bond determines if you reside in that specific area, thus, the common bond will determine whether you are qualified to become a member of the union or not, however, there are also possible factors that will make you as a member aside from residing in that area, you are also qualified if you are working as an employer in that specific area, or maybe if you are a member of a specific club or association.
Thus, regardless of your employment status, age, income and credit rating, the credit union will still accept you as a member and will surely help you save money regularly. Thus, whether you are rich or poor, you can still become a member of the credit union and save a money regularly for your future plans.
Using the sum of all members’ savings, the credit union is then able to provide low cost financial services to its members. Although each credit union (as all mutual societies) must ensure that enough money is set aside to ensure financial stability, all other profits are used to provide the lowest interest rates for members’ loans whilst returning an attractive rate of interest for its savers.
All money borrowed from or saved with a credit union must be in the name of a member and as such, no money can be borrowed in the name of your business.