What you need to know about Kingdom Credit Union Introductory Loans

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1 What you need to know about Kingdom Credit Union Introductory Loans Kingdom Credit Union Main Street Methilhill KY8 2DP Kingdom Credit Union 9 Albany Gate Glenrothes KY7 5NP mainoffice@kingdomcu.org.uk Kingdom Credit Union is a not-for-profit community bank which offers ethical and safe savings schemes and no-nonsense affordable loans. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Firm Reference Number

2 Introductory Loans If you are not already a member you can join the Credit Union and apply for a loan at the same time. The interest rate on introductory loans is 34.49% apr. When you apply you will need to provide the following: Proof of your income/benefits, i.e. benefit letters from DWP or recent payslips if you re working. 3 months bank statements (or your last Post Office statement). If you don t have the originals, ask your bank for a printout of your account s transactions from the last 3 months (if you request full statements they may charge you). 2 forms of ID to join the Credit Union such as passport, driving licence, TV licence, utility bill or letters from Council, DWP, HMRC, etc. Any letters provided for ID must be less than 3 months old. Membership Fee of 2.50 but you do not to need to pay this up front as we can deduct it from your approved loan when you collect it. Repaying your Loan If you are receiving benefits and request an introductory loan, you must get a benefit paid directly into your Credit Union account. We will deduct the loan amount and can repay the balance directly to your bank account. If you are working and are not in receipt of any benefits, you will need to open a savings account with us and set up a standing order for the amount of your loan repayment (plus 1). Once we have received the third standing order we can release the loan amount to you. How Much Can You Borrow? If you are receiving only Jobseekers Allowance or Employment Support Allowance at the JSA rate, the maximum amount you can borrow is 100. Unfortunately, if you are receiving less than 142 per fortnight (i.e. if you have a any deductions currently being taken directly from your benefits) and living independently, as responsible lenders we would not be able to offer you a loan. The minimum repayment for a 100 loan is per fortnight. If you are receiving higher levels of benefits, you can apply for an initial loan of up to 250. The minimum repayment for a 250 is 11 per week. If you are working, you can apply for an initial loan of up to 350. However, if you are not in receipt of any benefits you will have to set up a standing order. The minimum repayment for a 350 loan is 15 per week. Please note that ALL loans are checked to ensure affordability. As responsible lenders we will never offer a loan where making repayments could put the borrower into financial hardship.

3 What Happens Next? Once you ve handed in your application and all the relevant supporting paperwork (bank statements, ID, proof of income), it will be looked at by two members of our Loans Committee and we will phone you to let you know whether or not your loan has been approved. This normally takes less than a week but please allow up to 5 working days. If your application is approved you can collect cash from one of our main branches or, if you've signed a loan agreement, it can be paid by bank transfer. Please Note: If you are repaying your loan by Benefits Direct, your loan will be paid out only when your first benefit is received into your Credit Union account. To get your benefits transferred directly to your Credit Union account, the fastest method is to contact DWP or HMRC direct using the free phone lines in your local Job Centre Plus or by using their online service. Please find below the account information you will need to give them: Account Name: Kingdom Credit Union Account Number: Sort Code: Applying for a Top-up or Further Loan Once you have repaid 50% of your existing loan, you can apply to top up your loan to the original level. Once you have repaid 75% of your existing loan, you can then apply to top up your loan to a higher level. For example, if you initially borrowed 250 and have paid 125 off the capital to leave 125 outstanding, you can borrow a further 125 to top your loan back up to 250. However, if you have paid off the capital to leave outstanding, you can borrow up to to top up your loan to 500. If you have paid your loan back in full, you can simply apply for the full amount of the higher level of loan. You will need to fill out a new loan form, disclaimer form and benefits direct form and you will also need to bring in your most recent bank or PO statement. Saving While You Borrow We do insist that you start a savings account with the Credit Union and save at least 1 for each week that you have a loan outstanding. Once any loans are fully repaid, you will have a small nest-egg saved for a rainy day. Of course you can save more if you wish and anything over the minimum 1 per week can be withdrawn at any time useful at Christmas or in an emergency.

4 Repayment and Loan Interest calculations for Introductory or Unsecured Loans (34.49% apr.) If you are only receiving JSA or ESA at the rate of a week, 100 is the maximum amount we can lend you. If you are receiving other benefits such as income support, tax credits, child benefit, etc, you can apply for an initial introductory loan of up to 250. If you are working, you can apply for an initial introductory loan of up to 500. Please note that a first loan of over 350 may be credit checked. Loan Amount Repayment Amount No. of Payments Interest Charged Total to Repay 5.50 weekly fortnightly weekly fortnightly weekly weekly weekly weekly weekly weekly weekly weekly weekly THE IMPORTANT STUFF: As responsible lenders, we check ALL loans to ensure affordability. Interest quoted above is calculated assuming all payments made on time. Interest is charged daily on the reducing balance so you only ever pay interest on the outstanding balance. You can apply to top your loan up to its original balance once you have paid 50% of your existing loan. You can only apply to top up your loan to a higher level once you have paid 75% of your existing loan. You can make extra payments to your loan or into your savings account at any time. However, making an extra lump-sum payment to repay a loan down to halfway does not mean you can apply for a further loan straight away. You may still be required to make repayments for half the duration of the loan s original payment schedule. There are no penalty payments or surcharges for paying off a loan early. Our loans are as transparent and flexible as possible. If you want to repay your loan at a different rate from the above options, please ask for a printed loan quotation which details loan duration and interest charges.

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8 Form for direct payment of pension or benefits To be completed to have a DWP pension or benefit paid directly to Kingdom Credit Union. PLEASE NOTE THAT YOUR FULL BENEFIT PAYMENT WILL BE PAID TO THIS ACCOUNT Type of Benefit Benefit No. Frequency of Benefit: Weekly Fortnightly 4 Weekly Monthly Name Address Please arrange to pay the above benefit to the following bank details Bank of Scotland 60 High Street Leven KY8 4NA Sort Code: Account Number: Signed Date

9 Reinstatement of Benefit Form In signing this form I agree that, if my current benefit is redirected from Kingdom Credit Union at any time, the attached form will be sent to the Department of Work and Pensions to reinstate payments. Signed: Date: