Skip to content
Money Helper logo Money Helper logo Money Helper logo Money Helper logo Money Helper logo Money Helper logo
Cymraeg
  • Benefits
  • Everyday money
  • Family & care
  • Homes
  • Money troubles
  • Pensions & retirement
  • Savings
  • Work
  • Universal Credit

    Find out how Universal Credit works and how to manage your payment

    Benefits if you have children

    Entitlements to help with the cost of pregnancy or bringing up children

    Benefits if you’re sick, disabled or a carer

    Understand what support is available for coping with ill health

    Benefits in later life

    You may be entitled for help with other costs on top of your State Pension

    Benefits and work

    Extra support if you’re working, self-employed, or you’ve lost your job

    Benefits to help with housing costs

    Support to help with rent or mortgage payments if you’re on a low income

    Problems with benefits

    What to do if something goes wrong with your benefits

    Benefits

    All Benefits guidance

    Tools

    Tool

    Money Navigator

    Tool

    Money Manager

    Calculator

    Benefits calculator

    ALL TOOLS

    Pensions issues? Join our community group

    Join our private Facebook group ‘Your pension and planning for the future – by MoneyHelper’ to get help and to chat about pensions

  • Banking and payments

    How to choose, use and manage bank accounts

    Budgeting

    How to budget, find the best deals and switch to save money

    Buying and running a car

    How to buy and finance a car, deal with problems with car finance, and cut running costs

    Credit

    Credit basics, applying for credit, credit ratings and problems with credit

    Insurance

    Insurance for cars, health, travel, and help with insurance

    Everyday money

    All Everyday money guidance

    Tools

    Tool

    Compare bank accounts

    Tool

    Budget Planner

    Tool

    Money Midlife MOT

    ALL TOOLS

    Pensions issues? Join our community group

    Join our private Facebook group ‘Your pension and planning for the future – by MoneyHelper’ to get help and to chat about pensions

  • Becoming a parent

    Having a baby, returning to work, childcare costs

    Death and bereavement

    Wills, inheritance, sorting out estates

    Divorce and separation

    Sorting out money and homes, what if you have children, money after break ups

    Illness and disability

    Managing costs, extra financial support, help with work or study

    Long-term care

    Paying and getting funding, ways to pay, problems with care

    Student and graduate money

    Credit cards, bank accounts, student debts

    Talk money

    Difficult conversations, talking to teenagers, older people and partners

    Family & care

    All Family & care guidance

    Tools

    Calculator

    Divorce calculator

    Calculator

    Baby costs calculator

    Tool

    Budget Planner

    Calculator

    Benefits calculator

    ALL TOOLS

    Pensions issues? Join our community group

    Join our private Facebook group ‘Your pension and planning for the future – by MoneyHelper’ to get help and to chat about pensions

  • Buying a home

    Mortgages, help buying, remortgaging, first-time buyers, help and support

    Renting

    Renting a home to live in, renting out a home, and overcoming problems

    Homes

    All Homes guidance

    Tools

    Calculator

    Stamp Duty calculator

    Calculator

    Mortgage affordability calculator

    Calculator

    Mortgage calculator

    ALL TOOLS

    Pensions issues? Join our community group

    Join our private Facebook group ‘Your pension and planning for the future – by MoneyHelper’ to get help and to chat about pensions

  • Help with the cost of living

    Budgeting, paying bills, finding extra financial support, coping with job loss

    Dealing with debt

    Bills, court fines, help with debts

    Money problems and complaints

    What to do about mis-selling, compensation and complaints

    Scams

    Spotting scams and what to do if you’re caught out

    Money troubles

    All Money troubles guidance

    Tools

    Tool

    Debt advice locator

    Calculator

    Benefits calculator

    Tool

    Bill prioritiser

    ALL TOOLS

    Pensions issues? Join our community group

    Join our private Facebook group ‘Your pension and planning for the future – by MoneyHelper’ to get help and to chat about pensions

  • Auto enrolment

    Introduction, how it works, all about contributions

    Building your retirement pot

    How much do you need, ways to build your pot, transferring and merging

    Pension basics

    Starting a pension, types of pension, understanding pensions

    Pension problems

    Complaints, financial help when retired, changes to schemes

    State Pension

    How it works, what you might get, National Insurance

    Taking your pension

    Ways to draw your pension, when can you retire, Pension Wise appointments

    Tax and pensions

    Tax allowances, tax paid on pensions, tax relief

    Pensions and retirement

    All guidance, including how to use the Pension Wise service

    Tools

    Appointment

    Book a Pension Wise appointment

    Calculator

    Pension calculator

    Tool

    Money Midlife MOT

    Tool

    Find a retirement adviser

    ALL TOOLS

    Book your free Pension Wise appointment

    Over 50? Get free, impartial guidance from our government-backed service. We’ll explain your options for taking money from your pension pots.

  • How to save

    Getting started, getting the most out of savings, problems

    Investing

    How to invest, types of investing, buying and managing

    Types of savings

    Help with meeting goals, tax-friendly saving, saving for children

    Savings

    All Savings guidance

    Tools

    Calculator

    Savings calculator

    Tool

    Budget Planner

    ALL TOOLS

    Pensions issues? Join our community group

    Join our private Facebook group ‘Your pension and planning for the future – by MoneyHelper’ to get help and to chat about pensions

  • Employment

    Basics, benefits, tax and National Insurance

    Losing your job

    What to do, alternatives, redundancy pay

    Self-employment

    Starting out, insurance, tax, self-assessment

    Work

    All Work guidance

    Tools

    Tool

    Budget Planner

    Calculator

    Redundancy pay calculator

    ALL TOOLS

    Pensions issues? Join our community group

    Join our private Facebook group ‘Your pension and planning for the future – by MoneyHelper’ to get help and to chat about pensions

  • Benefits
  • Everyday money
  • Family & care
  • Homes
  • Money troubles
  • Pensions & retirement
  • Savings
  • Work
  • Universal Credit Find out how Universal Credit works and how to manage your payment
    Benefits if you have children Entitlements to help with the cost of pregnancy or bringing up children
    Benefits if you’re sick, disabled or a carer Understand what support is available for coping with ill health
    Benefits in later life You may be entitled for help with other costs on top of your State Pension
    Benefits and work Extra support if you’re working, self-employed, or you’ve lost your job
    Benefits to help with housing costs Support to help with rent or mortgage payments if you’re on a low income
    Problems with benefits What to do if something goes wrong with your benefits
    Benefits All Benefits guidance
    Tools

    Tool

    Money Navigator

    Tool

    Money Manager

    Calculator

    Benefits calculator
    ALL TOOLS
    Pensions issues? Join our community group

    Join our private Facebook group ‘Your pension and planning for the future – by MoneyHelper’ to get help and to chat about pensions

  • Banking and payments How to choose, use and manage bank accounts
    Budgeting How to budget, find the best deals and switch to save money
    Buying and running a car How to buy and finance a car, deal with problems with car finance, and cut running costs
    Credit Credit basics, applying for credit, credit ratings and problems with credit
    Insurance Insurance for cars, health, travel, and help with insurance
    Everyday money All Everyday money guidance
    Tools

    Tool

    Compare bank accounts

    Tool

    Budget Planner

    Tool

    Money Midlife MOT
    ALL TOOLS
    Pensions issues? Join our community group

    Join our private Facebook group ‘Your pension and planning for the future – by MoneyHelper’ to get help and to chat about pensions

  • Becoming a parent Having a baby, returning to work, childcare costs
    Death and bereavement Wills, inheritance, sorting out estates
    Divorce and separation Sorting out money and homes, what if you have children, money after break ups
    Illness and disability Managing costs, extra financial support, help with work or study
    Long-term care Paying and getting funding, ways to pay, problems with care
    Student and graduate money Credit cards, bank accounts, student debts
    Talk money Difficult conversations, talking to teenagers, older people and partners
    Family & care All Family & care guidance
    Tools

    Calculator

    Divorce calculator

    Calculator

    Baby costs calculator

    Tool

    Budget Planner

    Calculator

    Benefits calculator
    ALL TOOLS
    Pensions issues? Join our community group

    Join our private Facebook group ‘Your pension and planning for the future – by MoneyHelper’ to get help and to chat about pensions

  • Buying a home Mortgages, help buying, remortgaging, first-time buyers, help and support
    Renting Renting a home to live in, renting out a home, and overcoming problems
    Homes All Homes guidance
    Tools

    Calculator

    Stamp Duty calculator

    Calculator

    Mortgage affordability calculator

    Calculator

    Mortgage calculator
    ALL TOOLS
    Pensions issues? Join our community group

    Join our private Facebook group ‘Your pension and planning for the future – by MoneyHelper’ to get help and to chat about pensions

  • Help with the cost of living Budgeting, paying bills, finding extra financial support, coping with job loss
    Dealing with debt Bills, court fines, help with debts
    Money problems and complaints What to do about mis-selling, compensation and complaints
    Scams Spotting scams and what to do if you’re caught out
    Money troubles All Money troubles guidance
    Tools

    Tool

    Debt advice locator

    Calculator

    Benefits calculator

    Tool

    Bill prioritiser
    ALL TOOLS
    Pensions issues? Join our community group

    Join our private Facebook group ‘Your pension and planning for the future – by MoneyHelper’ to get help and to chat about pensions

  • Auto enrolment Introduction, how it works, all about contributions
    Building your retirement pot How much do you need, ways to build your pot, transferring and merging
    Pension basics Starting a pension, types of pension, understanding pensions
    Pension problems Complaints, financial help when retired, changes to schemes
    State Pension How it works, what you might get, National Insurance
    Taking your pension Ways to draw your pension, when can you retire, Pension Wise appointments
    Tax and pensions Tax allowances, tax paid on pensions, tax relief
    Pensions and retirement All guidance, including how to use the Pension Wise service
    Tools

    Appointment

    Book a Pension Wise appointment

    Calculator

    Pension calculator

    Tool

    Money Midlife MOT

    Tool

    Find a retirement adviser
    ALL TOOLS
    Book your free Pension Wise appointment

    Over 50? Get free, impartial guidance from our government-backed service. We’ll explain your options for taking money from your pension pots.

  • How to save Getting started, getting the most out of savings, problems
    Investing How to invest, types of investing, buying and managing
    Types of savings Help with meeting goals, tax-friendly saving, saving for children
    Savings All Savings guidance
    Tools

    Calculator

    Savings calculator

    Tool

    Budget Planner
    ALL TOOLS
    Pensions issues? Join our community group

    Join our private Facebook group ‘Your pension and planning for the future – by MoneyHelper’ to get help and to chat about pensions

  • Employment Basics, benefits, tax and National Insurance
    Losing your job What to do, alternatives, redundancy pay
    Self-employment Starting out, insurance, tax, self-assessment
    Work All Work guidance
    Tools

    Tool

    Budget Planner

    Calculator

    Redundancy pay calculator
    ALL TOOLS
    Pensions issues? Join our community group

    Join our private Facebook group ‘Your pension and planning for the future – by MoneyHelper’ to get help and to chat about pensions

Home
Cymraeg
  1. Home
  2. Everyday money
  3. Credit
Everyday money Credit

Borrowing from a credit union

Credit unions are community savings and loan cooperatives, where members pool their savings to lend to one another and might help to run the credit union. A cooperative is an organisation which is owned by and run for the benefit of the members who use its services. All credit unions offer savings and loan accounts while some (usually larger credit unions) may also offer extra products and services.

What’s in this guide

  • What are credit unions?
  • Why go to a credit union?
  • Borrowing through a credit union
  • How to borrow from a credit union
  • How to pay back your loan

What are credit unions?

Credit unions are community finance organisations run by and for their members.

There are several main features of a credit union:

  • People who save or borrow through one must have a common bond. They might live in the same area, work for the same employer or have the same profession. They can also be members of the same church or trade union.
  • They’re run on a ‘not for profit’ basis. Instead of paying a profit to shareholders, they use the money they make to reward their members and improve their services.
  • They can be large or small; some have thousands of members while others are much smaller.
  • Like bank and building society accounts, your money is protected under the Financial Services Compensation Scheme (FSCS) – up to £85,000, or £170,000 for joint accounts.
arrow icon
warning icon calculator icon arrow icon

Help with the cost of living 

Worrying about money because of rising rents, high energy bills or debt? If so, we're here to help.

Take the first steps to find your way forward with our guides to help you with the cost of living.

Back to top

Why go to a credit union?

Credit unions operate with three main aims:

  • to provide loans at low rates
  • to encourage all members to save regularly
  • to help members in need of financial advice and assistance.

There’s also a cap on the amount of interest they can charge on their loans of 3% a month or 42.6% a year APR. The cap in Northern Ireland is 1% a month, or 12.68% a year APR.

arrow icon
warning icon calculator icon arrow icon
Find out more in our guide Credit union savings accounts
Back to top

Borrowing through a credit union

The money the union holds in savings and current accounts is lent out to other members who need to borrow money at an affordable rate.

In the UK, credit unions are regulated by the Financial Conduct Authority and the Prudential Regulatory Authority.

Loans

To get a loan from a credit union, you might need to have been a member for a certain period of time, or have already built up some savings in a credit union account.

In England, Scotland and Wales, there’s a cap on the amount of interest that credit unions can charge on their loans of 3% a month or 42.6% a year APR. The cap in Northern Ireland is 1% a month, or 12.68% a year APR.

There are no hidden charges with credit union loans and no penalties if you repay the loan early.

As with any lender, you’ll be expected to repay your loan as agreed.

Most credit unions can lend for up to a maximum ten years on an unsecured loan and up to 35 years on a secured loan (where they’ll lend against something like your property or car). Not all credit unions will offer longer term loans.

arrow icon
warning icon calculator icon arrow icon
Apply to your local credit union to find out what sort of loans and interest rates are available
Back to top

How to borrow from a credit union

The first step is to find a credit union you can join and become a member.

arrow icon
warning icon calculator icon arrow icon
You can find a credit union in your area by using the following websites:
In Britain, Find Your Credit UnionOpens in a new window
In Northern Ireland,  Irish League of Credit UnionsOpens in a new window
Back to top

How to pay back your loan

You can pay back your loan in several different ways, although some credit unions might not offer all methods. You can do this:

  • by making payments face-to-face
  • by Direct Debit from your bank account
  • through you wages at work — if your employer has links to the credit union, you can pay back your loan by having money taken straight out of your wages
  • through Paypoint — some credit unions issue Paypoint cards which you can use to pay back your loan at your local shops
  • direct payments from your benefits – some credit unions take benefit payments such as Child Benefit directly and deduct your monthly loan repayment from your entitlement.
arrow icon
warning icon calculator icon arrow icon

Have you missed a payment?

Use our Debt advice locator tool to find free and confidential debt advice online, over the phone or near to where you live.

Back to top
Thank you for your feedback.
We’re always trying to improve our website and services, and your feedback helps us understand how we’re doing.
Share this article
Email Facebook Twitter
Share this with
WhatsApp LinkedIn
Copy this link
Send email
Copy this link
Credit

Alternative forms of credit

  • Borrowing from a credit union
  • Budgeting Loans and Budgeting Advances
  • Peer-to-peer borrowing and lending: what you need to know
logo
Looking for us? Now, we’re MoneyHelper

MoneyHelper is the new, easy way to get clear, free, impartial help for all your money and pension choices. Whatever your circumstances or plans, move forward with MoneyHelper.

Continue to website
logo
Looking for us? Now, we’re MoneyHelper

MoneyHelper is the new, easy way to get clear, free, impartial help for all your money and pension choices. Whatever your circumstances or plans, move forward with MoneyHelper.

Continue to website
logo
Looking for us? Now, we’re MoneyHelper

MoneyHelper is the new, easy way to get clear, free, impartial help for all your money and pension choices. Whatever your circumstances or plans, move forward with MoneyHelper.

Continue to website

Alternative forms of credit

  • Borrowing from a credit union
  • Budgeting Loans and Budgeting Advances
  • Peer-to-peer borrowing and lending: what you need to know
H.M. Government logo

MoneyHelper is provided by:

Money and Pensions Service logo
Level AA conformance, W3C WAI Web Content Accessibility Guidelines 2.1 Clear English Standard for Websites logo
Report an accessibility problem logo

Report an accessibility problem

  • About us
  • Getting help and advice
  • Contact us
  • Partners
  • Tools and calculators
  • Give feedback
  • Welsh language scheme
  • Blog

Follow us:

© 2023 Money and Pensions Service, 120 Holborn, London EC1N 2TD. All rights reserved.

  • Terms & conditions
  • Privacy notice
  • Accessibility
  • Sitemap
  • Cookies
  • Cookie preferences Cookie preferences
Talk to us live for…
Close
Talk to us live for…
Close
Talk to us live for pensions guidance using…
Previous Close
Talk to us live for money guidance using…
Previous Close
Talk to us live for pensions guidance using the telephone.
  • From overseas: +44 20 7932 5780
  • For self-employed: 0345 602 7021
Hours
  • Mon – Fri:9.00am – 5.00pm
  • Sat, Sun and bank holidays:Closed

Calls from the UK are free. We’re committed to providing you with a quality service, so calls may be recorded or monitored for training purposes and to help us develop our services.

Previous Close
Talk to us live for money guidance using the telephone.
  • Welsh: 0800 138 0555
  • Typetalk: 18001 0800 915 4622
  • From overseas: +44 20 3553 2279
Hours
  • Mon – Fri:8.00am – 6.00pm
  • Sat, Sun and bank holidays:Closed

Calls from the UK are free. We’re committed to providing you with a quality service, so calls may be recorded or monitored for training purposes and to help us develop our services.

Previous Close
If you’ve got a serious medical condition or disability and need travel insurance.
Use our travel insurance directory to get a list of specialist providers you can contact directly, as we can't give you quotes.

Need further help? If you’ve used the directory or you need further help to find an insurer, the British Insurance Brokers’ Association can link you with a broker. Call: 0370 950 1790

Previous Close
Call us for help dealing with debt.
If you’ve missed payments and are struggling with debt, call us and press 1 to speak to one of our debt advice partners. Hours
  • Mon - Fri: 9.00am - 5.00pm
  • Sat Sun and bank holidays: Closed

Calls from the UK are free. We’re committed to providing you with a quality service, so calls may be recorded or monitored for training purposes and to help us develop our services.

Previous Close
Call us if you’re worried about fraud or scams and need expert guidance.
Our specialists are here to support you over the phone. Hours
  • Mon - Fri 9.00am - 5.00pm
  • Sat-Sun and Bank Holidays Closed

Calls from the UK are free. We’re committed to providing you with a quality service, so calls may be recorded or monitored for training purposes and to help us develop our services.

Previous Close
Talk to us live for pensions guidance using web chat
Hours
  • Mon – Fri:9.00am – 5.00pm
  • Sat, Sun and bank holidays:Closed
Previous Close
Talk to us live for money guidance using webchat
Hours
  • Mon – Fri:8.00am – 6.00pm
  • Sat, Sun and bank holidays:Closed
Previous Close
Talk to us for pensions guidance using our web form

We aim to respond within 5 working days

Previous Close
Talk to us for money guidance using our web form

We aim to respond within 2 working days

Previous Close
Talk to us live for money guidance using WhatsApp

Download app: WhatsApp

For help sorting out your debt or credit questions. For everything else please contact us via Webchat or telephone.

Previous Close