LOAN GU I D E L I N E S november 2007
- Loans shall only be available to members aged 18 or over. Members aged 75 years and over will be eligible for secure loans only.
- Loan allocations are based on a share to loan ratio, length of membership and on ability to repay.
- Proof of identity, current address, and a statement of income and expenditure will be required.
- The Loan Officer or Credit Committee will consider all applications.
- Loan applications may take up to seven days for a decision.
- Loans should normally be repaid within two years. If the loan is for a holiday or car insurance we would expect it to be repaid within 12 months.
- For the first ten weeks of membership, new members shall be eligible to apply for loans up to their share balance only. This is known as a Secure Loan.
- After 10 consecutive weeks of saving a member can apply for £100 of a loan in addition to their share balance (1st Loan Policy.)
- After 20 consecutive weeks members shall be eligible to apply for up to 2 times their share balance. (2nd loan policy).
- If, in the opinion of the Credit Committee or Loan Officer, a member has been depositing amounts greater than £50 for the purposes of securing a loan, the offer may be restricted or refused. This is known as share loading.
- All 1st loans must be fully repaid before a member can apply for future loans.
- After successfully repaying the loan to terms the member can apply for future loans these will be restricted to 2.5 times the members shareholding. (3rd loan policy) and must be three-quarters paid before any further loans will be considered.
- 4th Loan policy will be restricted to up to 3 times the members shareholding and must be three-quarters paid before any further loans will be considered.
- After successfully repaying their previous loans to terms, members can apply for 5th loan policy, this will allow members, with a proven track record, to borrow up to four times their share balance.
- Members are encouraged to save regularly during the period of loan repayment.
- Members who are not happy about the decision on their loan application can apply in writing for a review to Board of Directors. The Board of Directors may uphold or change the earlier decision.
- No Credit Union Officer can act as guarantor for a loan.
- The maximum shares that can be transferred by the member to service loan repayments will be equal to two months repayments.
- Loan interest rates are 12% p.a on a decreasing balance.
- Failure to adhere to all of the repayment terms of the loan will result in action being taken against defaulters including all expenses and legal and court costs where appropriate.