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Loans

You must be a member of Watford Credit Union and over 18 to apply for a loan. In general, before making a loan application you need to save regularly over at least 13 weeks – ideally by paying approximately the same amount of money per week or month into your share (i.e. savings) account.

After the initial 13 weeks, you can at any time apply for a loan of no more than 3 times the amount of your savings (shares). The first loan is subject to an absolute maximum of £5,000 and subsequent loans £10,000. The Credit Committee will consider each application individually and may apply further restrictions, depending on the circumstanes.

All loans must be paid back within a maximum of 3 years. The interest charged is 1% per month on the decreasing balance of the loan. (12.7% APR). Click here to see examples of loan repayment costs using our loan calculator.

Applying for a loan
A loan application form must be completed for each loan. This can be downloaded or obtained from the office. The form detailing your current income and expenditure must also be completed.

When you apply for a loan, the Credit Committee will assess your credit worthiness and your ability to repay the loan. This will involve a discussion, either face-to-face or over the phone. You will be asked for evidence of your income and expenditure. Pay slips, proof of benefits and bank statements covering the last 3 months will be required. Proof of eligibility to remain in the UK for the length of the loan may be required.

You will be encouraged to save, even if only a small amount, whilst repaying your loan.

All loans are subject to availability of funds and the discretion of the Credit Committee.

If you need help filling in the loan application form or if you have any queries, you can leave a message at the office asking to speak to a member of the Credit Committee.

A decision on a loan application can usually be made within 3-7 working days.

Once the loan has been approved by the credit committee, you must sign the loan agreement. This is a legal document in which you undertake to pay the amounts specified by the dates specified. There is no penalty for repaying extra amounts at any time.

Agreed loans are normally paid by BACS. If you would prefer another method of payment, please raise this with the Credit Committee when applying for the loan.

Repaying your loan
If in any one calendar month you do not pay enough to cover both an agreed loan repayment and an agreed deposit into your share account (i.e. savings), any amount you do pay will be used first towards the loan repayment and then any surplus will be paid into your share account.

While you are repaying a loan, and if you are not in arrears, you may be able to withdraw money from your share account (savings) as long as your share balance does not as a consequence fall below one-third of your current loan balance (other conditions may have been applied in some cases). The Board of Directors may agree that these conditions can be waived, if exceptional circumstances apply.

The Credit Control Officer follows up all loan repayments that fall into default and if necessary the credit union will start a process of legal action. Any related charges incurred by the credit union can be added to the amount owing by the defaulter.

Further loans
You can apply for a second loan if at least 50% of the existing loan has been paid off.


Useful loan documents: