Family Loan

Our 'Family Loan’ allows individual members in receipt of Child Benefit to have a revolving loan of up to £1,000 from The Co-op Credit Union. This will be conditional upon Child Benefit being paid directly into your Co-op Credit Union account.

As a credit union member, you’ll also build up savings as you repay your loan. The minimum amount is £10/month, which will be taken from your repayments.

The maximum period you can borrow over is 18 months.  After 6 payments (for those paid Child Benefit every 4 weeks) or once you’ve paid off 50% of your loan (whichever comes first), you can apply for a ‘top up’ and we will set up a payment plan which is affordable allowing you to pay down your loan, build up savings and get back some of your Child Benefit to spend each month if you need it.

Both new and existing Co-op Credit Union members who are in receipt of Child Benefit can apply.

Note: Membership of The Co-op Credit Union is open to employees and pensioners of a wide range of co-operative organisations, as well as members of a number of co-ops and the Usdaw trade union. See the full list at: https://www.co-operativecreditunion.coop/join/who-can-join/

We will ask Family Loan applicants to apply via our Nivo secure messaging app.  As a step in the application, you will need to digitally sign a letter which we send on to the Child Benefit department instructing them to make future payments into the credit union.

Unfortunately, we can’t guarantee that we’ll give you a Family Loan.  We will run a credit check when you apply.  However, because you send us your Child Benefit to make payments, we can approve a lot more loans than we would with our standard loan products.  That means that only those with very poor credit will be declined.

The Family Loan is about helping you to strengthen your finances by borrowing affordably, building savings and improving your credit profile.  Because of this, we will run credit checks every time you apply to top up your loan and agree more borrowing as long as your credit profile is as good or better as the last check we ran.

Your successful repayments will be reported to the credit rating agencies so that the Family Loan account will help you to borrow elsewhere in future.

Once your Family Loan has been approved and you have signed your loan agreement, we will send the funds to your account the same day.  It will take a little while for the Child Benefit to be directed to the credit union account – around 6 weeks – so we will set the first repayment date for when we expect the money to start to arrive at the credit union.

You can always opt to start paying before that by making your first one or two payments manually.  This will save you a small amount of interest but is not a requirement.

It is important to note that we are not in control of when the Child Benefit arrives with us – this is down to how quickly it is processed by the Benefits Office.  We will start paying down your loan as soon as the Child Benefit begins being paid to us, even if that’s before the first payment date on your loan schedule.  This way you will always pay the smallest amount of interest.

We decide this with you when we agree a loan.  You will need to repay your loan within 18 months so the amount you can borrow will depend on how much you can afford to pay to the credit union out of your Child Benefit each month or week and how much you would like to have access to for day-to-day expenses after the £10 per month savings contribution which you cannot withdraw until you’ve paid your loan off.

We can set it up so that the amount you get back to spend is either returned to you automatically each time we process a payment by 5pm on the day we receive it, or leave it in a savings account which you can withdraw same day as and when you need it.

You can only have one Family Loan but once you have made 6 payments (for those receiving Child Benefit every 4 weeks) on your last loan or you have paid of 50% of your original loan (whichever is soonest), you can apply to “top up” your loan up to the maximum of £1,000 depending on your circumstances.

You can “top up” your Family Loan once you’ve made 6 repayments on the last loan you had (for those receiving Child Benefit every 4 weeks) or once you’ve paid off 50% of your original loan off.

To “top up” your Family Loan we will ask you to apply once again via Nivo.

You can track the balance of your Family Loan by registering for Member Access on our website at https://secure.co-operativecreditunion.coop/register

You will always be better off borrowing with one of our standard loan products than with a Family Loan because the rates of interest are lower.  The credit union will always offer you the cheapest loan we can based on your circumstances.  But having a standard loan does not stop you from applying for a Family Loan and vice versa if that is the best solution for you.

Often people will start off with a Family Loan, build a history with the credit union and move on to a standard loan product as they gather savings and demonstrate their ability to repay the Family Loan successfully.

All Family Loan borrowers will need to put at least £10 into savings every 4 weekly payment (or £2.50 per week for weekly payers).  This money is locked in until your loan balance falls below your savings balance.

However, unlike our standard products, Family Loan borrowers are able to access any excess above this linked savings contribution as and when they need to.  You can do this one of two ways:

1. Set up an automated payment so that every time we receive your Child Benefit we deduct your loan & savings payments and return the remainder to your bank account by 5pm the same day

2. Leave the excess amount in a separate credit union savings account which you can withdraw from whenever you need to via our online system

If you want to withdraw some of your savings you can arrange this yourself in the Members Area of our website at: https://secure.co-operativecreditunion.coop.  Withdrawals will be in your nominated bank account around 5pm the day you request it on a normal working day.

Your savings with the credit union are covered by the Financial Services Compensation Scheme (FSCS), so your money is just as safe as it is in a bank or a building society.

The best way to request a withdrawal is via the Members’ Area of our website.  If you make a withdrawal request through the Members’ Area it will be in your account by 5pm on the day you request it on a working day as long as you request it before 3pm.  If you miss the 3pm cut off, the funds will arrive in your account by 5pm the next working day.

Members can clear the balance of a loan at any time and we do not charge any early settlement fees for this.