What is a credit union?

A credit union is a community owned financial enterprise. You can make regular savings no matter how small, into your account and take out very low cost loans should you ever need to! Members who agree to save together, create a common fund from which its members can borrow at competitive rates. It is non-profit making, any surpluses being used for the benefit of its members.

Who can join Severn Four Credit Union?

Everyone who lives or works within the boundaries of the City of Bristol, together with parts of South Gloucestershire, and any member of their family who lives with them, can join by paying a membership fee of £2 and opening a standard share account. There is a junior savers section for those under 16 years of age.

Who owns it?

A credit union is owned and managed by its members. It is a non-profit making community enterprise, run by local people for the benefit of local people.

Who works in the credit union?

Credit unions are run by volunteers drawn from their members. Severn Four Credit Union also has 2 employees, who staff the office 4 days a week. If you want to be involved as a volunteer there is always something interesting to help with. There is training available for all volunteers. The more complicated the job in the credit union the more training there is available.

How do I become a member?

It's easy; just visit the office or one of our collection points during opening hours. It costs £2 to join and you can then open up a savings account with as little as a pound, and start enjoying all the benefits of being a member.

How do I save?

Savings are totally flexible so you do not have to save the same amount each time, but we do ask you to save regularly, however small the amount. Savings can be made at collection points, by standing order or by using your credit union paypoint card. The credit union is there to help you make regular savings so that they build up into a sizeable sum.

Do I get any interest on my savings?

All members own the credit union and share in its success. Instead of interest being paid a dividend is given at the end of each year. The more savings that you have, the more dividend you earn. At present the law allows credit unions to give up to an 8% dividend on your savings.

Where does the credit union invest members savings?

Members' savings are placed on deposit at the Cooperative Bank. Our credit union invests only with ethical investors.

Can I withdraw my money?

Yes! Most members however, prefer to keep their savings intact and growing, taking out a loan instead. This ensures they remain eligible for future loans and dividends. They also keep their life assurance benefits intact.

Do I have to take out a loan?

No, you can use the credit union just to save.

Who can apply for loans?

Anyone who is a member, is 18 or over and has been saving regularly with the credit union for at least 8 weeks, may apply for a loan. The credit union is there to get you into a savings habit. If you can show that you can save regularly it indicates that you can repay a loan regularly.

How much can I borrow?

Loans are granted to members on the basis of their savings record, their ability to repay and according to the loans policy of the credit union. A loan can be up to five times your savings paid back over a period of up to 3 years. The maximum loan we are allowed by law to lend is £10,000.

How much do loans cost?

Compare our rates with anywhere else!

We charge 1% interest per month on the reducing loan balance (12.68% APR), and there are no hidden costs or extra charges.

For example if you borrow £100 over 12 months you pay back £106.21 (compare that with a bank loan!).

And of course all that money goes back into your credit union.

Are there any penalties if I want to pay off my loan early?

No, none at all.

Can I choose the repayment period?

It's up to you to decide how much you can afford to pay and for how long. Loans must be repaid within three years, so your loan could be for two weeks or for 3 years.

Is my business private?

Totally. All officers and collectors abide by strict rules of confidentiality.

Is my money safe?

Yes! The credit union is insured against theft and fraud and is regulated by the Financial Services Authority. There are strict legal guidelines on how it is run, with regular audits and controls. In addition, since 2nd July 2002, all credit unions in this country are supported by a national compensation scheme through the Financial Services Authority which also supports all banks and building societies - in effect you will be compensated if the credit union goes out of business. This is something we do not contemplate with our credit union but it is a tremendous support for our members.

Further information is available from our credit union or direct from: Financial Ombudsman Service, South Quay Plaza, 183 Marsh Wall, London, E14 9SR. Phone: 0845 080 1800. Website: www.financial-ombudsman.org.uk

What about insurance?

Members' savings and loans are covered by free insurance (depending on age). If for example you have an outstanding loan and you die, your family does not pick up the debt. This insurance cover is considerably more expensive with other financial providers. Banks for example can charge up to 20% more for insurance on their loans. Watch out for those hidden costs. With the credit union you are secure in knowing that there are no hidden charges.

Where is my nearest paypoint?

See our Local Paypoints page.