The following article offers a discussion of the concept of credit unions. This form of financial collective has been operating for at least 200 years and continues to grow to this day … most likely because of the difference in which they operate compared to traditional banks.
What is Credit Union?
Credit unions are various associations that you can join to enable you to manage your wealth. They are not seen as banking institutions in the sense that they are accepted and can vary from having a small number of partners to having hundreds of thousands of members. CU is also a non-profit association … they basically exist for the benefit of all their members. Someone who has a financial account with someone has permission to choose about how the union is run.
How To Join Credit Union?
You can without difficulty join CU if you have the same ties with others. This may be a special bond created by living in a certain area, by becoming a member of a trade union, or by becoming a member of a union that has a relationship with your job.
How Do You Save CU?
CU usually offers and supplies facilities to open a savings account. As a matter of fact, you are generally allowed to save money for a certain period of time and subsequently you will benefit from loans offered by credit associations. This might be for a 3 month cycle for example. After that period, you will be allowed to apply for a loan. At this point, you can set aside as much as you can. Whether it’s a large or small amount, the most important thing is that you make regular savings. At the end of the year, credit unions will announce what they call dividends. You will receive interest payments from this dividend for your savings. Because credit unions are a non-profit organization and do not have shareholders to pay except members, you can enjoy respectable interest terms compared to other commercial financial institutions.
How to get a loan from a credit association?
The amount you borrow from a credit union depends on the amount you have deposited. The more time you become an associate, the greater the amount you are allowed to borrow from him. Because there is no profit generated by CU, you will have a loan scheme with a sympathetic level compared to other banking institutions.
What about insurance?
If you borrow funds from CU, you will be protected by loan protection. This will pay off the loan if you happen to die in an accident.