Can anyone tell me about Credit Unions?

[muggglewump]

The basic jist is that I have just left my job and will have to go back on IS. I can manage on this just but I know from previous experience that it is tough and I really need something to fall back on.
Now, I have £300 in savings in a basic bank account (no debit card, just a cashcard) but I have heard that CU give loans but you need to put money in first.

How much do I need to put in and how much can I borrow?

Obviously I am applying for jobs (2 applications pending so far) and I'm hoping I won't need to borrow at all but I'm thinking it's better to have the option there for an emergency.

Can anyone help?

This is the regulating bodys website and will give you quite a bit of information.
www.abcul.org/page/index.cfm

Also Google credit union and your area and it will bring up whether you have a local one. The list on the Abcul site is not complete.

You join and save for about 10/12 weeks and then you can ask for a loan. They work it out on what you have saved. You then carry on saving and a percentage goes to the loan and a percentage to your savings.

I love my credit union.

I know there is one in the next town. I had meant to join when I starting working but didn't.

Thanks for that though, I will look at the links.

Further question.
Now I have the £300 already and could come up with another £75 this week. My rent is £375 a month. April's rent is paid.
Is it better to wait for my HB to come through for May which more than pays the rent, or to pay in advance using my savings and then put the HB when I get it into the CU?

I know the straightforward answer would be to pay rent, but I'm worried by the time the next months is due, some emergency will come up, I'll have no savings and no way of getting a loan.

I would definatly make sure your rent is paid above all else. This is your most important creditor. When dealing with bills rent always comes first, followed by council tax, food and then your utilities. Any other debt you pay pro rata on what is left. If Aprils is paid though then you don't have to worry untill the beginning of May to pay the next lot.If you do put it in the CU then you can take it out for May's rent if needed, though you will have to wait a few days for them to get a cheque raised.

Credit Unions will consider emergency loans if you haven't been saving for the required time. Ours charges something like 12% on a loan.

Yes, that was sort of my question with regard to next month's rent.
Paying next month (May) in advance would wipe out all savings and I would have nothing left to join CU, whereas putting the £300 in will give me that plus the option of a loan if needs be.

I will be getting my rent paid as I will be back on full benefits, so that isn't really a problem. I was just wondering if it was OK to not pay in advance so I could use the money to join CU, now I will be living hand to mouth again.

Of course it is ok not to pay in advance. You pay them when it is due to be paid as everyone else does.

Have you got a bank account? I started off with a DD to my CU paying £5 a week and have gradually increased it over the last 2 years as I have had more free money. My CU money paid for our last second hand car.

Yes, I have a bank account, well two actually!

One that everything gets paid in and comes out of, and then my savings account.

Nice and organised then

It's times like this that organisation is the key.

I think you only need £1 to start a Credit Union account. Obviously if you can manage a bit more that would be helpful, but you don't need vast amounts. They do like you to save regularly and to keep it up over the weeks and months, so don't overstretch yourself.
I never got any extra money, but got all my money back when I withdrew from the credit union.
But I could have left it in the building society and got a small amount of interest.
I didn't need to borrow money.
Sounds like Credit Union is a good option for you.

You are perfectly correct DutchOma, but as you surmise I think that she wants to get as much as she can in there so if she needs to borrow then she has a good pot. But as you say, Muggle will need to save regularly as well.

Right, that sounds OK then.
I will go and see them next week, join with my savings and then see if I can commit to saving, say £5 a week for now.

Of course I'm hoping to have a job soon so no need for loans at all but I need to think ahead incase I end up struggling.

Thanks for the help

It's a pleasure. I think you are being very sensible making sure you have every thing in place.

Are you also a member of your local Freecycle groups?

www.freecycle.org

Like Ebay but you express an interest in an item and then if you are selected you pick it up for free. When you join make sure you set it to recieve emails as a daily digest or you will be inundated with emails.

Yes, I am on Freecycle. I've actually given away a few bits and pieces but never asked for anything. I tend not to check very often as there's nothing I really need and I don't drive so some of the bigger things I may like are impossible for me to get anyway.

On a brighter note though I am getting an application form tomorrow for a job in the Job Center.

Or even Job Centre

Best I learn to spell first!

Best of luck with the job application. I really feel for one looking for work in this climate. I'll keep everything crossed for you.

Hi just wondering if anybody knows with a family loan can you make a small one of payment to allow you to then be able to top up the loan ?
regards