Credit union launches £2m loan fund to help people out of lockdown

Bradford District Credit Union hopes the move will help people back on their feet without having to resort to loan sharks

Bradford District Credit Union is to create a special £2m fund to offer a new ‘Unlocking Loan’ to help new and existing customers recover financially from the Covid-19 crisis. 

The credit union has timed the loan, which has a low interest rate to help people who have been struggling, to coincide with the proposed partial reopening of retail and hospitality.

Applicants will need to be payroll scheme employees, employed members or self-employed members and the loans will have interest rates of 1% per month, 12% per year and 12.7 APR% for any new applications between the £2,000 and £5,000 level.

Applications are online only, but the credit union promises decisions will be made within three working days.

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Payment terms will also be between six months and five years, but early repayments can be made without incurring any penalties.

The credit union hopes the loan will stop people in the area turning to loan sharks, a danger it regularly highlights, most recently with last autumn’s ‘Loan Sharks are Monsters’ campaign.

CEO Andrew Bowker said: “BDCU is here to help new and existing members as best we can through this difficult and challenging time allowing for current and future plans to be fulfilled.”

The ‘Unlocking Loan’ will be available from 21 of April – 30 of September 2021 subject to successful applications and demand. 

All new loan amounts over £2000 to a maximum £5000 will be subject to its normal affordability checks along with credit checks. The new loans unfortunately cannot not be added to any existing loans and members with loans taken out in the last six months will be unable to apply.