Forum Topic

Thamesbank Credit Union

Cllr Lambert's repeated  subliminal advertising  needs addressing.Is a loan at an interest rate of 42% the best rate available?Is there any other Union that invites savers to join yet fails to provide a published rate of interest pre application?

John Todd ● 3139d10 Comments

A good example of how a local councillor can help and commendable in being active on this website.If only...etc.etc..

Raymond Havelock ● 3133d

Thanks for your help Guy. I'll check out those things that you've mentioned as soon as they email me back.As for the equal loan repayments, I'm aware that's how it usually works but as the credit union only charges you interest on what you owe, the interest part should reduced on each payment. Guy offered me an explanation of why this didn't happen though, but I need to check my statement again to see if it the reason I was given adds up. Thanks though.

Natasha Adams ● 3133d

I have asked our team for an explanation for Natasha (and me - unhappy to have a disgruntled member).

Guy Lambert ● 3133d

Natasha, I am not an expert but do know that its common for a fixed term loan (say £1000 over 12 months) to have the total interest calculated at the start of the loan and charged in equal instalments. Looks like they need to work harder in educating their customers how things work.... I just watched this programme on BBC, a good reminder why credit unions are overall a very good thing!  http://www.bbc.co.uk/iplayer/episode/b088kw25/the-war-on-loan-sharks

Iain Muir ● 3133d

There isn't any more clarity when you use the credit union either. November I got my first statement from them (I did the child benefit thing about six months before that) and whilst my first payment was received on x date, they then sent me my part and didn't deduct the remaining  money from the money I owe. There has been no further mention of this £80 any where on the statement. Not good when making payments reduces the interest owed besides the fact that that's £80 of my money.Add in that they say that you only pay money on the amount you owe. You would presume that means every month the interest part gets lower, right? The first month I paid £12.82 of interest and the following month I paid £12.84. I'm not exactly money wise but even I know that if my balance has reduced then so should my interest if I am only paying it on the money I owe.

Natasha Adams ● 3135d

We can make the statement because it is true. If someone has a clear offer from another provider we will match or beat it.We are also endorsed by the main Credit Union Association and regulated by both the PRA and the FCA.There is nothing extraordinary about a 42.8% APR: it was introduced by your government as an attempt to diminish the impact of those who charge over 1000% APR to support their Tory 'advisers'

Guy Lambert ● 3137d

Thanks Guy.I've now done some comparison work with other credit unions in this area. Your rates are not the cheapest ( how can you ever make such a statement) and as you say your website is materially lacking. Others have such matters as a leaflet giving guidance to potential borrowers endorsed by a credit union association.Your observations on your child benefit scheme are quite extraordinary too. To be charged 42% interest as a method of savings is quite breathtaking.Delighted that you pay an unpublished 1% dividend. Given your unseen accounts and your  high interest charges surely it should be much higher?John

John Todd ● 3137d

We are currently redeveloping the website and I agree it leaves something to be desired. I also agree there could be greater clarity and that will be addressed, but I don't agree that there are other entities that are cheaper. Of course if you are a millionaire you can borrow very cheaply but if you are an ordinary working person needing a small loan the banks provide no service. 3% per month or 42.8% APR is our maximum interest rate allowed by law pursuant to an Act of Parliament made by your government (previously it was 2% per month, ~ 27%APR). The change was made because Credit Unions offer very small loans where the admin costs are very high proportionally (banks will usually not lend less than £3000)Didn't see your interest rate query. Last year we paid a 1% dividend and we will decide on this year's dividend at the AGM - it's up to members. 1% was a lot better than many banks pay.  We do not pay interest as such except to junior savers.The child benefit loan is offered to people who sign across their child benefit (this is popular with many Credit Unions) and many of our members who take this offer are really delighted to find that they have saved up some money at the end of the loan period, as well as paying off their debt. So much better than commercial lenders, where they will pay loads more and save nothing. We are always happy to engage with members and where they have an acceptable credit score we will offer better terms. The 'John Lewis' approach would indeed apply here: in fact we are absolutely delighted to be given the opportunity to beat commercial rivals - it is nearly always excellent business for us and good for the member too. We can do this because we don't pay our directors anything and the only dividends we pay are to our savers, so our running costs are way below the competition.

Guy Lambert ● 3138d

Dear GuyI readily concede your motivation but as you know there other entities who are cheaper and who have greater clarity in their website. Of course credit history and other factors come into any decision you and your colleagues have to make when considering lending.You don't address my interest rate query for savers although there is mention of a dividend without any history shown of any being paid.The site doesn't allow  access to details of the current directors unless you are a member. There's no link to your accounts either so it's not clear what or who possibly benefits from the running costs a factor pertinent to any dividend payment.You mention a john Lewis approach on beating any other quote. However your 'child benefit' loan where the parent agrees to nominate their account with you to receive the benefit still pays a premium interest rate of 42%. I regard this as excessive and is not it seems eligible for negotiation.Best wishesJohn

John Todd ● 3138d

John, there is no 'subliminal advertising'. I make a straightforward case for the Credit Union because I believe it offers excellent value. It is owned by its members, no board member takes any financial benefit, members can boot us out at any general meeting and it largely competes against finance providers who charge eye-watering rates of interest and advertise heavily on daytime television and elsewhere.Our maximum rate of interest is indeed 42.8% APR, charged on small loans for people with poor credit scores. This is a real bargain compared with (for example) Provident Financial  who charge 535.3% or Quickquid (1295% - partly no doubt to pay for 'advice' from John's colleague Sir Gerald Howarth, MP for Aldershot)As John will find if he consults our website, not only do we charge as little as 5.1% but we also commit to be never knowingly undersold - if you show us an offer from a competitor, we commit to match or beat it.

Guy Lambert ● 3138d