Logo for Plough & Share

A Credit Union in Crediton

Plough & Share, Devon's own democratically run financial co-operative, has a service point in Crediton supported by Sustainable Crediton.

It is open every Saturday morning in the Community Room at the Fire Station in Charlotte Street between 1030 and 1200, and run by Sustainable Crediton volunteers.

So why is that good news, what is a credit union, and can you help? 

There are over 500 credit unions in the country offering a local, ethical banking service to around a million members. Their three main aims are to: 

  • encourage their members to save regularly. Small amounts are fine;
  • offer straightforward loans to members; and
  • provide members with help and support in managing their financial affairs, if needed. 

A typical credit union lending rate is much cheaper than any alternative for people turned down for loans by high street banks, who are often forced to use loan sharks or pay day loans at punitive rates of interest. Although the lending rate may be higher than the cheapest credit card or loan, credit unions support their borrowers so debts don't spiral out of control. The amount of interest a credit union can apply is capped at 26.08% per annum, whereas doorstep and other lenders do not have this restriction. The interest on the loan is calculated daily and is on the diminishing balance; there are no fees for paying off a loan early or making extra payments. 

Plough & Share offers loans to members which are based on their savings up to £10,000. They can also offer loans - which are not based on savings - up to £2,500. The first loan when based on savings is normally limited to twice the member's savings. First loans have a maximum one year repayment period. Later loans can be for up to five years, and three times the member's savings. All loans are given where there is clear affordability to repay. 

Plough & Share also offers a payroll deduction scheme to help employees save, with members including Devon County Council and Devon & Somerset Fire & Rescue Service. In January 2012 credit unions were given new powers by the Government to widen their membership, and pay interest on savings instead of a (usually) small dividend. 

Credit unions are regulated by the Financial Services Authority. They can't lend out all their members' savings, or plough the remainder into anything that carries too much risk; all savings have the same government protection as bank savings accounts.

Find out more about credit unions at: Plough and Share and Moneysaving Expert.  


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