||Members of the Credit union who are of full age – 18 years – may apply for a loan for a provident or productive purpose. All loans are provided from the savings of other members.
Loan application may be made at any time during the normal office hours.
The maximum loan offered is £15,000 above the member's share balance. This limit applies to all members of the Credit Union. (This does not mean that a member can demand a maximum loan). Beragh Credit Union’s loan policy allows members to borrow up to the amount of their savings at any time. Members with covered by shares loans should ensure that repayments are maintained regularly otherwise arrears will occur which may affect the granting of later loans.
A member will normally be expected to establish a regular pattern of savings before applying for a loan. Members with small savings cannot expect to receive large loans. As a rough guide, a member should have saved one fifth of the amount they wish to borrow. (This does not mean a member can demand a loan of five times savings).
The following are some of the factors taken into account when considering a loan application
Every loan application receives careful consideration and most loans – over 95% - are granted. However, in the best interests of the Credit Union and indeed of the member concerned, some loans are refused.
- A regular pattern of savings
- The member’s previous loan repayment record
- The purpose of the loan
- The member’s ability to repay as agreed
- Frequency of loan applications
It should also be noted that loan applications are considered by the loans committee and/or approved counter staff.
Loans over £5,000 are considered over 4 years, there are certain loans which are regarded as Annual loans, eg. Holidays, Christmas, Car Tax, Insurance, Rates etc. Such loans should be fully paid within 12 months.
Before any loan is paid out, the member and where applicable, the guarantor, is required to sign a PROMISSORY NOTE. This is a legal document whereby the member – and the guarantor – promise to repay the loan and interest at a stated rate of repayment.
Where the amount of shares/savings at the time a loan is approved are equal to or less than the loan amount, those shares /savings become pledged as security for the loan and may not be withdrawn. It is the policy of Beragh Credit Union that any money saved after the loan is granted may be withdrawn if the loan is not in arrears.
There may be times when, for genuine reasons or unexpected circumstances, a member finds difficulty in maintaining the promised repayments. If this happens it is essential that the member contacts the office immediately. Any delay will make the situation worse and it will become harder to make a new repayment arrangement. Our Credit Control Officers are always available to discuss loan account problems.