Low interest loans for key workers

A WOKING-based credit union is offering discounted loans to key workers to thank them for their efforts during the pandemic.

Boom, which has an office in Sheerwater, has cut the interest rates on its loans, which are aimed at people with a poor credit rating or no credit history, and those on a low income.

SCREEN TIME – Catherine Illingworth is guiding Boom’s growth in Surrey

“These people are doing a tremendous job,” said Catherine Illingworth, in charge of Boom’s business growth in Surrey.

“The country would be in a terrible state without them and not all key workers have good credit ratings,” Catherine said.

Boom is also offering Key Worker Plus, in which borrowers can take advantage of the credit union’s Family Lift-Off Loan, in which repayments are made through child benefit.

 The child benefit not being used to pay off the loan goes into a savings account that can be accessed at any time.

Loans are from £300 to £15,000 and are paid from one to five years. Interest rates are between 21% and 42%, which is a lot lower than those offered by many lenders who prey on those who can’t get loans from banks or building societies.

“It takes five seconds to scupper a credit history but it can take years to build it up again,” Catherine said.

She said not all those with a poor rating were irresponsible and many had been let down by former partners or had missed the occasional payment for very good reasons.

Boom is partnered with the organisation Stop Loan Sharks and works to stop people turning to unscrupulous or unsafe lenders.

Applicants for a loan are screened to make sure they can and will make the repayments, and all those accepted have to agree to open a small savings account with Boom, which can be accessed only when the loan is repaid.

“We often find that people then go on saving,” Catherine said.

She said that a recent study showed that 74% of the loans that Boom issued were to people with a credit score of 536 or less, which is in the bottom 10% in the area.

“From this we know that we are hitting our target market and fulfilling our purpose of helping everybody to be financially included. A credit union loan can help to improve your credit score,” Catherine said.

Boom Surrey, which serves the whole of the county, started in 2011 and merged with the West Sussex arm of the credit union three years ago.

The Surrey offices will have to move from Sheerwater as the area’s regeneration progresses, but will remain in Woking.

Many of the lenders are referred to Boom by Woking Borough Council, which has been providing its office in Dartmouth Avenue free of charge and also helps to fund its administration.

Boom started because, unlike most other counties in Britain, there wasn’t a credit union in Surrey.

The chairman and board of non-executive directors spent a couple of years building up a pot of about £1.5 million so that they could start making loans.

That pot is now £6.5 million and there are currently nearly £2 million in loans.

There are 1,500 Boom savers and borrowers in Surrey, with 242in Woking where almost £129,000 is being lent.

The normal savings accounts give no interest, but the Junior Savers gives 2% a year. These are opened by an adult on behalf of a person under 16.

The Junior Savers account can have a maximum of £30,000, and the normal accounts £75,000.

Catherine said Boom is always looking for people who don’t need loans to open a savings account.

“This is a way of saving while also doing something for the good of the community,” she said.

For more information, call 01483 917958, email catherine.illingworth@boomcu.com or visit www.boomcu.com.

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