Loans

Just about anything that enhances the quality of your life is a good reason to apply for a loan. Examples are:

• a downpayment on a house
• a new or second-hand car
• school uniforms and other educational expenses
• wedding expenses -- for the bride, groom and parents
• a holiday and holiday spending money!

• Members who have established or are in the process of establishing their ’good character’ (i.e. their savings and loan history) with us,
• Members who can afford to repay the loan, and
• Members who have savings to pledge against their loan
• Good character: Your character is your primary collateral. We define character as a member’s savings and loan history with us. The establishment of a good savings and loan history will be a benefit to you.

Pledged savings: Whilst your character is your primary collateral, we also ask that you pledge your shares that are equal to or less than your new loan balance against your new loan. Pledged savings may not ordinarily be withdrawn.

Loan interview: We are a responsible lender who likes to establish that each member can afford to repay the new loan they are agreeing to. As such, we conduct a short loan interview with each new loan application to make sure you can afford your new loan and that you will not become over-indebted.

Documentation: We require the following documentation to fully assess your eligibility for a loan. A form of photographic identification and 2 months most recent bank statements. If you have more than one bank account we will require 2 months statements for all accounts.

Waiting period: Members normally wait 1 day to find out if their application has been successful. This depends on the satisfactory receipt of all documentation. Some loans will be referred to the Credit Committee (see below), but this should not delay the decision.

The Credit committee considers a certain number of loan applications. The Credit committee meets weekly

• when the member’s loan to share balance will go higher than at any previous time;
• when the member has been in arrears or is borrowing frequently
• when the member is not saving regularly

Reasons why some loan applications are unsuccessful include:

• when the member is in arrears or has a poor savings history with us;
• when the member cannot afford the loan;
• when the member is borrowing frequently or for necessities that he/she should be able to pay for without credit; or
• when the shares to loan difference is going too high.
• Sometimes the credit committee will recommend a member postpone an expensive purchase until his/her loan balance reduces. Other times, the credit committee will agree to the loan only if the member increases their savings or they have to meet the credit committee to discuss their current position.

Members are encouraged and expected to borrow within their means. Any member experiencing difficulty in repaying his/her loan is urged to contact the credit union to discuss their difficulties.

Members are encouraged and expected to save (no matter how little) while repaying their loans.

The maximum loan limit is £50,000.

Interest charges on loans in SAG Credit Union is never more than 1% per month on the reducing loan balance. This interest rate, expressed in terms of annual percentage rate (APR), is just under 12.68%. Some commercial lending institutions may charge from 20% to 100% or even more.

The rate of interest in SAG’s Credit Union has remained unchanged since its formation, no matter how often the bank rates and other financial institutions’ charges have fluctuated.

There are no charges whatsoever for operating your account in SAG Credit Union.

The first week/month you miss a loan repayment, your account falls into arrears. If it remains in arrears for three weeks or more, our Credit Control Department will contact you. If you find yourself in financial difficulty and unable to meet your credit union loan repayments, you should contact us to make an appointment to discuss your account with the credit control officer.

SAG Credit Union Limited understands that members can find themselves in financial difficulties, but we can help you to resolve your issues. No matter what the reason, if you have:

• lost your job,
• become separated,
• are on a low income,
• fallen behind in loan repayments,
• suffered a bereavement, or
• find yourself over-indebted

...and find it difficult to make ends meet, contact the office to make an appointment to speak to one of the staff from the Credit Control section. The earlier you address the issue the quicker the matter can be resolved. Our credit control staff will:

• meet with you in private to discuss your overall situation,
• help you to write a realistic budget, if you wish,
• agree a temporary arrangement until you have overcome your issue.

IF YOU FIND YOURSELF IN DEBT

• Don’t panic;
• Do not ignore the problem -- it will not go away;
• Take immediate action; and
• Contact our Credit Control department today to arrange an appointment and start the process of getting back on your feet!