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It is quite easy to believe right now that there are no other choices because the standard means of having credit has become so basic that being at the mercy of increasing interest rates and inflated charges on loans and credit cards has become so basic too. However, there is this unknown alternative which is called the credit union movement.
A credit union is being run by its members which serves as a profit sharing and financial co – operative. And by offering a more financially attractive alternative to the standard products offered by banks, the popularity of the credit union movement in the UK is increasing.
The organization has three main goals that need to be achieved since maximizing profit is not their main concern.
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To encourage its members to save regularly.
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To provide loans and financial assistance to its members at the lowest rates of interest possible.
To offer its members help and support, if required, in the management of their financial affairs.
Last but not the least, being a member will let you take the best benefits that the credit union can offer.
The common bond is usually the secret to becoming a member of the credit union. The common bond determines whether or not you will be accepted as a member of a credit union and this could be that you reside in a specified area, work for a particular employer or within a particular trade, or that you are a member of a certain club or association.
Thus, regardless of your employment status, age, income and credit rating, the credit union will still accept you as a member and will surely help you save money regularly. Thus, whether you are rich or poor, you can still become a member of the credit union and save a money regularly for your future plans.
Using the sum of all members’ savings, the credit union is then able to provide low cost financial services to its members. Although each credit union (as all mutual societies) must ensure that enough money is set aside to ensure financial stability, all other profits are used to provide the lowest interest rates for members’ loans whilst returning an attractive rate of interest for its savers.
You also have to keep in mind that as a member, the money that will be borrowed is entitled to you or else, no amount of money can be borrowed for your business.