Local families can now borrow up to £500 with a Family Loan from Norwich Credit Union.
Previously, credit union member had to save for 3 months first before applying for a loan. But now parents and carers needing funds in a hurry can apply immediately for a maximum Family Loan of £500. It allows families to pay for a big ticket item, such as a new washing machine or rent deposit, at a much lower rate of interest than other types of instant credit (click the below link to see price comparison table).
All applicants who meet the credit union's eligibility criteria must agree to have their Child Benefit paid directly into their new account; the credit union will then deduct the loan repayments. The member can choose to have any remaining balance loaded onto a convenient Allpay cash card or added to their NCU savings account.
Loans are subject to an interview to assess affordability and we are unable to offer our Family Loan to anyone who is currently bankrupt, in a DRO, IVA or Debt Management Plan. We are also unable to lend if you have unaddressed CCJs or have defaulted on current credit in the last 12 months.
Charlotte Crowe needed cash to secure a flat for her family in Norwich. She was able to pay the landlord the rent deposit immediately by arranging a Family Loan:
"I would 100% recommend Norwich Credit Union's Family Loan to anyone who is struggling to find money urgently."
"We would have been homeless without the credit union's help. They took a chance on me at a time when I really needed help... I have this flat now, and in a year I will have paid off my loan. I'm paying £15 off each week, and the other £5 is going into my savings account."
NCU President Jon Warne explains:
"The Family Loan is an ethical way of making Child Benefit go further. We will interview everyone who applies; if successful, they must first become an NCU member and then authorise payment of their Child Benefit into their new account. We'll do the rest."
Norwich Credit Union's Family Loan has a fixed interest rate of 3% per month (42.6% APR) on the reducing loan balance. Free life insurance is included and there are no set-up or early repayment fees.
Jon continues:
"Our experience is that often, once a member has repaid their loan, they get into the habit of saving and borrowing with the credit union. We also offer junior savings accounts for children and young people up to the age of 18."
Family Loan benefits - at a glance
Borrow up to £500
Fixed loan interest rate - 3% per month on the reducing balance (42.6% APR)
Repayments made straight from Child Benefit
The quicker the member repays, the less interest they pay
No hidden fees, charges or repayment penalties
Free life insurance (terms and conditions apply)
Encourages a savings habit
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Terms and Conditions
Family Loan - terms and conditions
1. To apply for an instant Family Loan, applicants MUST attend an interview to check they can afford to repay the loan. If successful, they need to join Norwich Credit Union (see eligibility critera below) and organise to have their Child Benefit paid directly into their credit union account.
2. The Family Loan is open to any individual receiving Child Benefit who lives, works or studies anywhere within the county of Norfolk or in an NR postcode area. This covers the postal areas NR1 to NR35, PE14, PE30 to PE38, IP20 to IP22 and IP24 to IP27.
3. Members can apply for the Family Loan on the same day they join - subject to affordability checks and by appointment only - see above.
4. To be eligible, members MUST telephone the DWP (0300 200 3100) from Norwich Credit Union's office and authorise payment of their Child Benefit into their credit union account.
5. After the first benefit payment is received the loan will be transferred and, on the member's instruction, the remaining Child Benefit balance can be deposited into their credit union savings account or paid into their bank account. These transfers will be made the day after the benefit payments are received.
6. Norwich Credit Union will charge a fixed loan interest rate of 3% per month (42.6% APR) on the Family Loan.
7. The maximum loan repayment term is 12 months.
8. Members who default on their Family Loan will be subject to Norwich Credit Union's debt recovery procedures, as outlined in our Policy Manual.
9. Loans are subject to an interview to assess affordability and we are unable to offer our Family Loan to anyone who is currently bankrupt, in a DRO, IVA or Debt Management Plan. We are also unable to lend if you have unaddressed CCJs or have defaulted on current credit in the last 12 months.
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Example repayment schedule and comparison table
Overall cost comparison based on a £500 loan repaid over 12 months