Frequently Asked Questions

A. General Information
01 What is a Credit Union?
A Credit Union is a not for profit financial co-operative, owned and run by its members.

02 Who runs the Highland Communities Credit Union?
Highland Communities Credit Union is run by the Board of Directors - volunteers who are elected by the membership at the AGM. The Board of Directors sets all policies and procedures of Highland Communities Credit Union, and decides how money is spent, and how Highland Communities Credit Union should proceed.

Members also elect the Supervisory Committee, whose job it is to ensure that all officers of the Credit Union are acting within the law, the Rulebook and the agreed Policies and Procedures. The Supervisory Committee also ensures that officers are acting in the best interest of the members.

The Credit Committee is also elected at the AGM. The Credit Committee meet to decide whether to pass or reject a loan.

The Collection Points are also staffed by volunteers.

Highland Communities Credit Union is run by its members. Although we currently have one part time paid employee, we rely heavily on volunteers. There are various opportunities for members to get involved, and the more volunteers that we have, the less onerous the work becomes for everybody.

03 Who can join Highland Communities Credit Union?
All members must have a common bond. In Highland Communities Credit Union’s case this is living or working with the Highland region. All residents within the Highland region can join Highland Communities Credit Union provided they agree to abide by Highland Communities Credit Union's rules.

People who stay outside the Highland region cannot become members. However, members who move outside the common bond may retain their membership at the discretion of the Board, and provided such members do not exceed 10% of the total membership.

04 Does Highland Communities Credit Union have any connection with other Credit Unions?
Credit Unions are owned and run by their own membership. In this respect they are independently run.

However, Highland Communities Credit Union is affiliated with the Association of British Credit Unions Ltd (ABCUL) in order to benefit from co-operation, including:

• To influence government etc.
• Insurance benefits.
• Credit Union paperwork and promotions.
• Training.
• Exchange of ideas with other Credit Unions.
• Participation in the ABCUL AGM.

05 What are Highland Communities Credit Union's aims?
Our Mission Statement is:  Highland Communities Credit Union aims to provide a local savings and borrowing facility responsive to the needs of the members and to strengthen our community by working together.

• Highland Communities Credit Union provides local accessible saving and loan facilities for members, helping them to manage their finances.
• Highland Communities Credit Union provides loans, which must be for provident and productive purpose, at low rates of interest (0.5% up to 2% per month on a reducing balance).
• Highland Communities Credit Union protects members and their families by providing life insurance cover on both shares and loans at no extra cost.
• Highland Communities Credit Union collection points are manned by members, trained and supported by the Board of Directors.

06 Is Highland Communities Credit Union regulated?

Highland Communities Credit Union is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). We are also a member of the Financial Services Compensation Scheme (FSCS) and the Financial Ombudsman Service (FOS).

Our Firm Reference Number (FRN) is 213955.

B. How does it work?
01 Are members expected to save regularly?
Yes. Credit Unions encourage members to save regularly, even if you can only afford a small amount. By saving regularly, you can show the Credit Committee that you can put away a regular sum of money, and so are likely to afford to repay a loan.

02 How can I save?
You can pay in at any collection point, or by standing order mandate direct from your bank account. (Standing Order mandates are available from Collection Points or to download from here)

03 How much should I save?
Members can save as much or as little as they can afford. The more that you can save, the stronger your financial position will become.

Shares keep you prepared for an emergency, put a break on spending, and provide a safety margin above your loan repayments.

04 Can I withdraw my shares at any time?
Normally it will take a couple of days to process a share withdrawal but in some circumstances it may take longer so it is best to plan ahead when you are wanting to make a share withdrawal.

Highland Communities Credit Union provides life savings insurance on your shares. It is also worth remembering that shares take time to build up, and Highland Communities Credit Union relies on people saving so that we can provide loans. The size of loan that you can get is dependent on the amount of shares that you have (see Loans section). Also, if you have a loan, then you will be required to retain a certain value of shares.

C. Loans
01 Can anyone get a loan from Highland Communities Credit Union?
All members over the age of 18 can apply for a loan. You cannot get a loan if you are not a member, or if you are under the age of 18.

02 How soon can I borrow?
You must save regularly for 10 weeks, or 3 months if paying by Standing Order, before you can apply for a loan.

03 How much can I borrow?
You can apply for a loan of up to 3 times the value of your shares  (to a maximum of £10,000).

04 What can I get a loan for?
Loans must be for a “provident and productive” purpose. This can include:

TVs; cookers; fridge freezers; furniture; car tax / insurance; carpets; footwear; holidays; cars; electricity bills; telephone bills; car repairs; fuel; garden sheds; decorating; house repairs; TV licences; Christmas; school expenses; tools; washing machines; dental / medical bills.

Each member has their own priorities and the list above is not exhaustive.

05 How much will it cost me and how is interest calculated?
Highland Communities Credit Union charges interest each month on the decreasing balance of the loan.

For loans under £5,000 interest is charged at 1.5% per month (19.6% APR).

For loans over £5,000 interest is charged at 0.75% per month (9.4% APR).

Instant Loans of up to £250.00 interest is charged at 2% per month (26.8% APR).

For secured loans see 09 What is a secured loan. Interest is charged at 0.5% per month (6.4% APR).

On the last day of each month, we calculate the interest to be charged based on your loan balance at that date. The interest is then added onto your loan balance.

When the Credit Committee calculates your repayment amount, they take into account the interest that will be added on. This way, you make the same repayment throughout the whole period of your loan. This repayment covers the amount of money that you borrowed, and also the interest that is due.

This table shows what repayments you would make for various sizes of loans over 1 year.

Amount Borrowed	Weekly (52 Weeks)	Total Repayable	APR	Monthly (12 Months)	Total Repayable	APR
£300	6.32	328.30	19.60%	28.37	330.04	19.60%
£500	10.53	547.18	19.60%	47.28	550.07	19.60%
£700	14.74	766.06	19.60%	66.19	770.11	19.60%
£1,000	21.05	1094.41	19.60%	94.56	1100.15	19.60%
£1,250	26.31	1368.02	19.60%	118.20	1375.19	19.60%
£1,750	36.84	1915.2	19.60%	165.48	1925.27	19.60%
£2,000	42.10	2188.81	19.60%	183.36	2200.31	19.60%

If you want to pay off your loan balance in full, then you can do so at any time. You will NOT be charged an early repayment fee, and your loan will cost you less, as you will only have been charged interest on your balances up to the date of repayment.

06 When do I start paying interest on my loan?
The first interest will be added onto your loan balance on the last day of the month your loan was granted. This interest is the interest due for the following month.

07 What will the Credit Committee do?
The Credit Committee is composed of volunteers who meet once a week to consider loan applications.

When the Credit Committee receive your application, they will verify that you have completed the application form correctly. If we need to contact you to clarify any details, then we will do so.

The Credit Committee will look at how much available income you have to see whether or not you can afford the repayments. This helps to ensure that members do no get into debt that they cannot afford to repay, and by doing so, it safeguards members savings. Remember: you are borrowing the savings of other members!

The Credit Committee will also consider whether the length of the loan is acceptable. To decide this, they will look at how regularly you will have this expense. For example:

• A loan to pay an electricity bill should be paid back within 3 months, as you will receive another one in 3 months’ time.
• A holiday should be paid back within one year, as it is likely that you will want another holiday again next year.

These are guidelines – you will not necessarily be refused a loan for a holiday just because you want to pay it back over 2 years. However, you might be asked to consider how you will pay for a holiday next year.

08 How long will it take to get a loan?
Normally loan applications are processed and paid out to you within one week of applying. However, there are circumstances where this may take longer so please try to plan ahead when applying for loans.

09 What is a secured loan?
A secured loan is where you borrow an amount less than the value of your shares.

Some benefits of taking a secured loan are:

• You keep your savings intact. You will still have this money in an emergency.
• Your savings are insured, as is your loan. If you had shares of £1000, and you withdrew £500, then if you were to die, your nominee would receive approximately £1000 (your £500 savings plus a like amount in insurance). However, if you had borrowed the £500, your savings of £1000 would be doubled to £2000, and your loan would be paid off.
• You are never borrowing above your capabilities – you will always have enough savings to cover your loan if you needed to pay it off immediately.

10 Is it best to borrow for one item at a time?
Yes, this is the best way to borrow if it is possible. You can clear one item more quickly than two or three and you will be charged less interest, as interest is calculated on the reducing balance of your loan.

11 If I have an outstanding loan balance, can I borrow more money?
Yes, this is known as a “top up” loan. When a “top up” loan application is considered, the Credit Committee will take into account the outstanding loan balance plus the amount that you want to “top up”. So if you have a balance of £200, and you want to borrow another £500, the Credit Committee will treat the application as a new application for a loan of £700.

As a general rule, the Credit Committee would like you to have repaid a substantial amount of your old loan before they consider a top up loan.

12 What is a loan agreement?
A loan agreement is the legal document which outlines the terms of your loan. It contains details of the amount borrowed, the date of the first repayment, and the estimated finish date (assuming that you make each repayment as agreed).

By signing this document, you agree to the terms set out in the agreement, including the repayment amount and frequency (eg. you agree to repay £10.00 every week).

Two signed copies of the agreement are printed and signed – one for you to keep for your own records and one for Highland Communities Credit Union to keep.

13 What happens if I fall behind with my repayments?
If you fall behind, then we will send you a reminder, in case you have overlooked your repayments.

If you fall behind with your repayments, then you should try to catch up as soon as possible, otherwise you will be paying interest on a balance that is higher than was expected.

Highland Communities Credit Union recognises that, in some situations, falling behind with your repayments is unavoidable. You may be on holiday and so miss a week or two at the collection point. The best thing to do in this circumstance is to pay extra money before or after your holiday to you bring you back in line.

If you fall into difficulty, then it is important that you contact Highland Communities Credit Union as soon as possible. We may be able to renegotiate your loan so that you do not need to repay as much each week or month.

If you become unemployed, then Highland Communities Credit Union may be a great benefit to you. If you have the money to clear your loan, then it might be a good idea to do so, which would enable you to get new, smaller loans as the need arises. These smaller loans will be more affordable if you have a reduced income.

It is important to keep your repayment record up to date, as if you fall behind then future loans may be restricted.

The Credit Control Officer is the volunteer who keeps track of members loan repayment records. If you fall behind, the the Credit Control Officer will send you a reminder, and ask you to contact Highland Communities Credit Union to see if we can help in any way.

Insurance
Life Savings Insurance
This is paid on all savings held by members aged 16-79. If a member dies, their nominee receives any shares held in Highland Communities Credit Union. In addition to this, they may receive an insurance payment. The table below shows how much insurance will be paid out:

Age on the date of the deposit	Amount of insurance
16-65	100%
65-69	25%
80+	0%

Loan Protection Insurance:
Paid for all members aged 18-69 who have outstanding loans.

If a member dies while they have a loan outstanding, then the insurance will pay off the loan in full.

Summary of important exclusions for both Life Savings and Loan Protection Insurance (full policy available from the office?)

Pre-existing condition limitation:
Insurance will not be paid out where death results from an illness or injury for which medical advice, consultation or treatment was received within the 6 month period prior to the deposit of shares or receiving a loan.

Insurance will not be paid where death is as a result of:

• War or service in the armed forces.
• Suicide within 6 months of deposit or granting a loan.
• HIV/AIDS

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