Loans and Christmas Expenses
I bet you're tired of hearing about Christmas expenses and how to spend less, don't buy this, don't buy that, etc. We're not going to talk about that today!
Low income, topped up with Universal Credit
Many families, especially single parents fall into the trap of shortage of cash to cover specific expenses. Christmas, Birthdays and Holidays can be planned and saved for, but when something goes wrong, like car broken down, a need for a new appliance, children needs and the list is long.
When this happens, the answer is NOT "apply for a loan". But how can you put yourself in a position that you don't need to apply for a loan, but rather be able to use savings?
Get into the habit of saving via borrowing
This is where the borrowing can make a difference for someone. Not because borrowing is a great option, but because borrowing from local credit union does!
After the hardship we've been put through since the pandemic, we've been trying to get our finances up. There are millions of people with low credit score, or with no credit score history but with the cost of living crisis are being forced to borrow to cover certain expenses.
If those people apply for payday loan, they will be pay 100s% in interest due to credit score history. That is not the case with any local credit union. Credit unions are not-for-profit organisations and their main focus is people and not profit.
While you can be in need of immediate cash, the credit union usually arrange with you the amount you can pay back the while and yet save on top of it. 100% of new borrowers get the WOW effect that they have been able to save money while repaying the loan. Which encourage them to keep saving after the first loan is paid off. Usually that puts them off borrowing unless what they saved wasn't enough.
I can't save enough, still repaying the loan
Sometimes, the saved amounts are not enough to cover a certain expense, and you already have a loan with your local credit union. All you need to do it request a Top Up loan. Which means that you restart the loan repayments and receive what you already paid (minus interest). Yet continue saving for next time you need cash out.
This cycle of saving and borrowing helped many people borrow less and save more over time. It is not an overnight solution, it takes time and patience.
Moreover, they have been able to build and rebuild their credit scores.
No credit score loan
Since years ago, credit unions were granted approval to give out loans not based on credit score but affordability. It means, it doesn't matter what credit score you have, if you are able to pay back the loan, you get it!
However, it was only approved if the borrower is a parent in receive of child benefit. Families with children are the priority.
Read more about Family Loan, and if you have question, do not hesitate to email hello@clevr.money
