What Is Credit Union?

What Is Credit Union?

Have you ever heard about credit union? Do you know what that means? Credit union is a non profit financial organization that is built by people with same goals and a relatively similar way of thinking and direction, for the benefit of their communities. Usually they live in the same city, such as trade unions.
Credit union‘s presence is useful to provide financial benefits for their communities, because there is no term shareholder in their dictionary. Fellow members of mutual benefit, there is no advantage to a third party shareholder. They help those who can not get access to ordinary bank products, a line of living in less affluent communities for people struggling with their finances. They are welcome alternatives to payday loans or doorstep lending.

There are all specific activities, so you should check if there is one that fits and can interact with you in your area. To become part of the credit union, you need to share a ‘common bond’ with other members, for example you have to join working in the same place or area, or you can also work for the same company as other members, such as belongs to the same church, trade union or other associations. However, if one family member of you are already a member credit union, then the other relatives who lived at the same address can usually join as well.
Credit union aims to help you control your money by encouraging you to save what you can, and only borrow what you can afford to pay. In essence, their savings and loan cooperatives, this simply means that members pool their savings to lend to one another and helping to run the credit union. This is done in a ‘not-for-profit’ way, so that cash is only used to run the service and reward members and also not to pay for outside shareholders, like most other financial institutions. Throughout the year, they run a credit union must set aside enough money to ensure they do not go bust. Any remaining money is channeled back to those who have a savings account as a ‘dividend’, or is used to try and improve the overall service. To save all that money is safe, credit union can not lend all their members ‘savings’ or plow the rest into something that takes too many risks. Plus all money in savings unions has the same government protection as bank savings accounts.