Credit unions

What do credit unions do?

Credit unions can help you save for the future and offer low cost loans if you need to borrow a little extra.

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They provide savings accounts, loans and other financial services at fair interest rates. They are run by their members for their members. Any profits are invested back into the credit union for the benefit of all.

Credit unions are strictly regulated and your savings are protected by the Financial Services Compensation Scheme, making credit unions safer and cheaper than payday loans and doorstep lenders. They are easy to join and very approachable.

Credit unions are for everybody – both savers and borrowers. You don’t have to be employed or have a bank account to join. Members make regular savings, which can be as much or as little as you want. You can save up to £10,000 with your credit union.

Once you’ve joined a credit union, you can apply for a loan if you need to. This is generally after you’ve been a member for a certain period of time, usually around 13 weeks. The amount you can borrow is based on the amount you have saved.

Some credit unions can also provide instant or emergency loans. These are considered on a case by case basis.

Cornwall’s credit unions provide free life insurance on their loans (conditions apply).

All the money saved in Cornish credit unions stays in Cornwall, so they’re great for people who want to invest in local communities too.

Cornwall Council works with Kernow Credit Union, which operates across the whole of Cornwall.

Kernow Credit Union are opening a new Service Point at Barclay's Bank St. Austell in October 2015. You can find out more about Cornwall’s credit union by clicking on the link below:

Take a look at some credit union case studies to see how they can help.

Mr and Mrs X were doorstep borrowers who had never managed to save

Credit union staff helped Mr and Mrs X go through their budget and found that they could save a small amount each week, which quickly built up in a savings fund. When Mr and Mrs X needed to borrow, they were able to obtain two small secured loans from the credit union instead of topping up their expensive doorstep loan as they would have done in the past.

Mr and Mrs X have never missed a visit to pay in their savings and loan repayments and are now on target to pay off their doorstep loan by the end of the year. They will also have enough to see them through Christmas without having to resort to credit.

Mr and Mrs X say that joining the credit union was the best thing they have ever done and have even persuaded some of their friends to join. They have also vowed to save the money they are currently using to pay off their doorstep lender once their account is clear.

Mr and Mrs P approached the credit union for a loan after Mr P lost his job

A quick budget check up showed that the couple were deeply in debt and another loan would not be in their interest. The credit union outreach worker set up an appointment for Mr and Mrs P with the Citizens Advice Bureau (CAB) for debt advice, helped them sort out their paperwork and at their request went with them to the CAB appointment.

Mr and Mrs P now have their debts under control. They keep in regular contact with the outreach worker and plan to join the credit union when Mr P finds work.

Miss J needed a loan to decorate her flat

Miss J had already received a quote for a loan from a doorstep lender but had heard that the credit union interest rates were lower.

She took out a loan to help cover her decorating materials and is repaying it regularly, as well as saving a small amount each week.

Miss J has recently returned to the credit union for a further small loan to replace her fridge.

Mr B wanted a small loan from the credit union

A look through Mr B’s finances showed that he wouldn’t be able to repay a loan and needed help with budgeting skills. After a number of sessions with the credit union outreach worker, Mr B could understand and manage his budget better. He joined the credit union and now saves a small amount each week.

Mr B had used doorstep lenders for more than 20 years and hadn’t realised how much interest he was paying. He now understands just how high the interest is and is determined never to take out another doorstep loan.

The outreach worker also helped Mr B with other issues, and Mr B now brings in any paperwork he doesn’t understand so the outreach worker can read through it with him.

  • Volunteer Cornwall - find out more about volunteering to help out at your local credit union
  • Citizens Advice Bureau - free, independent, confidential advice on benefits, money, housing, legal and other issues
  • Cornwall Works – a free service offering a variety of activities and support, dependent on your needs, to help improve confidence and job prospects
  • Money managing tips - tips on how to manage your money, save on your bills and what support is available
  • Benefits - how to claim housing and council tax benefits, what you may be entitled to and how to let us know if your circumstances have changed
  • Debt advice - free, confidential, impartial debt advice from Trading Standards for anyone living in Cornwall
  • Loan sharks - information on loan sharks and how to report them