SUMMARY: Where do you turn when you are desperately needed a loan and the banks say no? Why not join a credit union? Or better still, start your own.

Take control over your money - start your own credit union. Part 2

Author: Melinda Varley

Credit unions in the UK are also required to reach a statutory minimum

Covering you and your members

In the UK a credit union has to take out insurance to protect its members' funds from fraud and mismanagement. However, there is no industry-wide compensation scheme to protect members' savings should a credit union become bankrupt.

Before you set up your credit union from scratch, consider investigating if credit unions in neighbouring areas would be willing to expand their common bond to your locality or place of employment.

Many credit unions are expanding their common bonds to cover much larger populations, and your area may already be included in someone else's plans. ABCUL can advise you on initiatives happening where you are, and put you in touch with the right people.

To the wider community, a Credit Union improves the general financial knowledge of its member and offers training to its volunteers investing in local money.

It helps restore a sense of pride in disadvantaged and disaffected communities and provides a means of targeting financial exclusion.

For further advice and assistance on setting up your own credit union visit www.abcul.org.

Did you know?
Secured loans always attract the lowest interest rates. That's because the lender is protecting his risk by taking a legal charge against your property. Then, if there is a default, the lender can call in the loan and, in the final event, sell the property in order to recover the money you owe.

Did you Know?
The concept of medical insurance was proposed in 1694 by Hugh Chamberlen. In the late 19th century, early medical insurance was actually disability insurance, in the sense that it only covered the cost of emergency care for injuries that could lead to disability. This insurance model continued until the early 20th century when patients were expected to pay all other health care costs out of their own pocket under what is known as the fee-for-service business model. Modern medical insurance programs emerged mostly after the 2 nd World War.

Today in the UK, most comprehensive private medical insurance programs cover the cost of routine and planned health care procedures, although emergency care is still largely the province of the National Health Service.

Did you know?
Unsecured loans tend to attract higher interest rates. That's because the lender is taking a bigger risk by lending without taking a legal charge against your property. Then, if you default, the lender must resort to the Courts to recover the money you owe.

Did you know?
Secured loans always attract the lowest interest rates. That's because the lender is protecting his risk by taking a legal charge against your property. Then, if there is a default, the lender can call in the loan and, in the final event, sell the property in order to recover the money you owe.

A survey conducted by Experian, the largest UK credit reference agency, found that 54% of applicants for personal loans were refused. Of those accepted for a loan, 43% were offered a higher rate than the rate they saw advertised. That's why, if you're searching for a personal loan, it's a good idea to apply through a loan broker who will know the lenders who'll best suit your circumstances.