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New Credit Union In Gloucestershire Reducing Use Of Loan Sharks

by Jim ONeil on February 2, 2011

in uk loans news

A new credit union established in Gloucestershire was designed to encourage people to avoid loan sharks and other illegal money lenders. These unscrupulous businesses charge very high interest rates to those who can least afford them. The new credit union targets individuals who do not have a bank account or whose credit rating is poor.

Before this credit union expanded, only Cheltenham, Stroud, and Gloucester residents were able to access its services. Suzanne Wigmore helped to spearhead the expansion and reported that credit unions are continuing to grow. She commented that those who target illegal money lending referred many new customers, making themselves quite useful.

Previous credit union customers reported that there is an increasing level of need for a credit union service that loans realistic sums of money at reasonable interest rates. One customer expanded on this,

saying that credit unions do not offer borrowers money that they know will be unable to be paid back. Many have turned to credit unions after running into issues when borrowing from doorstep lenders. Often, these lenders create more financial problems for already cash-strapped individuals.

A credit union is set up as a cooperative, with individuals paying into the service. Members are the owners and managers of the entity and run it democratically. The money accrues as savings and the individuals can then apply for small loans that feature low interest rates. Financial guidance is also provided for those who need it.

Anyone who lives or works in the county of Gloucestershire can become a member of the Gloucester Credit Union, regardless of age, employment status, or income. Members must complete an application, provide identification, and meet credit union representatives in person at least once. The interest rates charged on loans are usually only one or two percent monthly, based on the reducing balance.

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