FAQ – Loans

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See below for our frequently asked questions on Loans

Family loan – To be eligible, you must provide proof that you are in receipt of child benefit. A family loan is payable direct to us from your child benefit and is not credit checked. Upon signing your loan agreement, we send a letter out to the child benefit office and have your child benefit paid to us instead, then we deduct the amount for your loan repayment and holding saver, and any remaining funds are placed into your Share 1 account. If you’d like these placed to a different savings account or sent to your bank directly, just let us know. The maximum amount for a first time family loan is £500, or £750 if you’ve had a previous family loan with us. Interest rates on a family loan are 42.6% APR. Personal loan – A personal loan is suitable for anybody who is not in receipt of child benefit, and needs a loan from £100 – £2,999. Personal loans are credit checked, and are payable via either benefits or a standing order to ourselves. Interest rates on a personal loan up to £2,999 are 42.6% APR. Personal loan 3k+ – A personal loan 3k+ is only for existing members who require a loan from £3,000 – £7,500. Personal loan£3k+ are credit checked, and are payable via either benefits or a standing order to ourselves. Interest rates on a personal loan 3k+ are 24% APR. All loans are subject to affordability checks.

If we’ve reviewed your application for a personal loan, then you cannot apply for a family loan for the next 6 months, as we have to take your credit report into consideration. You can still continue with your personal loan application, and set up a standing order to us to make your repayments.

If you have been declined a loan with us due to your credit score you cannot apply for any loan product for at least 6 months.
After 6 months, you can apply again.

This depends upon the size of your defaults, and whether or not you are working to address them. If you have been advised on prior applications to address your credit report and you continue to not do so then your application may be declined.

Providing you have made the minimum payment requirements you can “top-up” your existing loan with us. The minimum requirements for each product are stated below:
Family loan – 15% of your original balance must be repaid for new members
Family loan – For current members, at least £100 must be repaid
Personal loan – 15% of your original balance must be repaid
Personal loan 3k+ – 25% of your original balance must be repaid

We do not allow one-off payments in order to be eligible for a top-up, your contractual payments must reduce the balance.

Yes! If you would like to pay more than your minimum payments you are able to do so, just let us know you want the additional funds allocated to your loan. There is no additional charges for doing so.

Yes! There is no additional fees for doing so, just call us on 01332 348144, and let us know this is what you wish to do, we can send you a debitcard payment link or send us the amount via bank transfer.

A decision should be made on your loan within 2 – 3 working days. Our loans team will be in touch if they require further information, or a decision has been made.

Your loan term is the amount of time you will be making repayments. For loans up to £1,000 the maximum term is 12 months. The maximum term for all other loans is 60 months (5 years).

Call us on 01332 348144 to discuss your account and circumstances. We will work with you to find the best solution to make your repayments and maintain your financial wellbeing.

If you’ve missed a payment, then you could end up repaying more due to the interest that’s charged on the outstanding loan balance. If you repay your loan early, then you will pay less interest overall.

Interest is calculated on the outstanding loan balance and is charged daily at the rate set out in your loan agreement.

A Holding Saver account acts as a security against your loan. You pay £2 a week in addition to your loan repayment. At the end of your loan you then have access to your holding saver, where you can either transfer to your Share 1 account and keep saving – or withdraw to your bank account.

Once the balance in your holding saver is higher than your remaining loan balance, you can use the funds in your holding saver to pay off your loan early!

Simple answer is ‘no’.

If you have entered into an individual voluntary arrangement (IVA) then you are restricted to borrowing no more than £500 without obtaining permission from your insolvency practitioner.

When we consider affordability, we will look at other debts, repayments. You are very welcome to join us and save regularly, just a small amount every week or month soon build up into a useful fund for when you need it.

Citizens Advice has an article that explains the things to think about when considering an IVA

IVAs are a legally binding form of debt management that work by freezing your debt for a fixed period, usually 5-6 years. During that time you must commit to paying a monthly amount towards your debt. After the fixed period, any money you still owe will be cancelled but only if you have made all your agreed payments and not been in breach of your agreement.

An IVA is arranged through firms called insolvency practitioners.  Unfortunately some are motivated by the fees they will earn than your best long-term interests.
 
IVAs are not free. There are fees, we regularly see £4,000 to £5,000 being charged. Your monthly repayment will be set to cover both the amount owed to the lenders and your IVA provider’s fee. But the IVA fees are paid first. So many times we see thousands being paid, but that only reduces the fee, and has little impact on reducing your debts.
 
IVAs also include conditions that will affect your financial independence.  You may be asked to sell your car or other personal items of value.  Any savings will be taken in and if you receive an unexpected gift or an inheritance you may have to pay all of it into the IVA.  You may even have to remortgage your home to cover some of your debts.
 
Your IVA could affect your ability to borrow for up to 12 years.  The arrangement will appear on your credit history and make it difficult or very expensive to obtain such basics as phone contracts and credit cards. There may be legal restrictions to stop you borrowing even from family or friends or take up salary benefits like cycle to work schemes and season ticket loans.  In most cases you will need to get written permission from your insolvency practitioner.