Dispelling the myths about credit unions

FAIR BANKING: HEY Credit Union chief executive Matthew Stevens, right, and governance officer John Smith

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Credit unions are continuing to gain popularity as trusted, fair and ethical financial service providers.

Many more people could benefit from joining and using a credit union, but some may be put off by misconceptions about them.

In this article, the team at HEY Credit Union – which is 25 years old this year – set out the true facts to dispel the most common myths about credit unions.

MYTH 1: Credit union loans are not as keenly priced as those from a bank.

FACT: Because credit unions are not-for-profit, they can provide some of the most competitive rates in the market. Members also benefit from no arrangement fees, no hidden charges, no settlement penalties if they want to repay a loan early, and free bereavement cover (subject to conditions) in the event of death. Check out your credit union’s website – you may be surprised how much money you could save by switching to a Credit Union Loan.

MYTH 2: Credit unions are only for people who want to borrow small amounts or for short periods.

FACT: While you can borrow as little as £300 over six months, HEY Credit Union can provide loans up to £20,000 spread over periods up to ten years. This enables them to meet a wide range of needs, while ensuring all loans are tailored to your personal circumstances.

MYTH 3: You have to be a member and save with a credit union before you can take out a loan.

FACT: With HEY Credit Union, you can apply for membership and a loan at the same time. There is no need to wait. You don’t have to be an existing saver, though credit unions do encourage members to save if they can, as it’s the best way to achieve financial security.

MYTH 4: Credit unions are only for people on low incomes or with a poor credit history.

FACT: On the contrary, credit unions have products and services to benefit people of all financial backgrounds. HEY Credit Union is known as a great place to save and borrow for anyone who lives or works in the Humber Region. By joining a credit union, you are keeping funds in your community and supporting the local economy.

MYTH 5: Your savings aren’t as safe as they would be with a bank.

FACT: Your money is just as safe in a UK credit union as in any bank or building society. Your savings deposits (up to £85,000) are protected by the Financial Services Compensation Scheme (FSCS), so if HEY Credit Union was unable to meet its financial obligations, your money would be fully protected.

Now that you know the truth about credit unions, you may be interested in joining one. Find out more at www.hullandeycu.co.uk