Need a small loan – Credit Unions and CDFI’s are 2 of the options

If you’re looking for a small loan, there are different options you can look at if you can’t get a loan through a bank or are rejected by online lenders.

The right option for you will depend on how much you need to borrow, what you can comfortably afford to pay back each week and how much the cost of the loan is.

There may be other things you want to consider such as if you can pay back the loan early without a fee, if the loan is flexible if you need to miss a payment and if they offer help and support if you are struggling with your payments.

Before applying, think about whether borrowing is the right option for you and whether you can comfortably afford the payments. If you’re struggling financially, free debt advice may also be available.

CDFI’s

Not-for-profit community lenders can be an option if you are looking for a small loan. They are sometimes called CDFI’s. When you apply to a CDFI it is usually online and they will often use information from credit reference agencies and your bank statement to check if a loan is right for you.

They know everyone’s circumstances are different, which is why they don’t look for a perfect credit history. Many also offer loans if you only receive benefits.

Eligibility criteria vary between providers. Some CDFIs consider applications from people on lower incomes or receiving benefits, subject to affordability checks.

Their loans can cost more than loans from banks, Credit Unions and some other lenders, so it’s important to compare the total cost when looking at your options, as well as considering other things about the loan that are important for you.

Moneyline is one of a number of not-for-profit community lenders operating in the UK. Whether it is suitable for you will depend on your individual circumstances and the other options available.

Find out more about CDFI’s here:

Credit Unions

Credit Unions are membership organisations. They offer savings and loans to their members. What services are available and who can apply will depend on the Credit Union. The cost of their loans can be lower than CDFI’s.

Some credit unions may require you to become a member before borrowing and some may encourage regular savings. Requirements vary between credit unions, so it’s worth checking directly with the provider.

Here is a link that could help you find the right Credit Union for you:

https://www.findyourcreditunion.co.uk

Other Small Loan Options

Moneyline on MoneySavingExpert

MoneySavingExpert has a list of commercial and not for profit loan options which may be helpful for you when looking for a small loan . Moneyline is listed on MoneySavingExpert’s guide to credit unions and alternative not-for-profit community lenders (CDFI’s).

Read the MoneySavingExpert guide here

Could You Get Help Without Borrowing?

There may also be other support available that could help with your costs.

Moneyline’s free MoneyToolkit can help you check whether you could be getting more income, save money on your bills and find support with money worries.

It’s available whether you’re thinking about borrowing or simply want to see what help may be available.

Try our free MoneyToolkit here

Free Help With Money Worries

If you’re worried about debt or managing your money, free and independent help is available from organisations such as StepChange, National Debtline and Citizens Advice.

Comparing Your Options

When comparing loans, look at the total amount you’ll pay back, the payments you’ll need to make and how long you’ll be making them for.

Moneyline calculates interest daily, which means customers only pay interest for the period the loan remains outstanding. There are no fees for making additional payments or settling the loan early.

Frequently Asked Questions

What is a CDFI?

A CDFI is a not-for-profit community lender. CDFIs can offer small loans and will usually check your circumstances and whether the loan is affordable before making a decision.

What is the difference between a Credit Union and a CDFI?

Credit unions are membership organisations that offer savings and loans to their members. CDFIs are not-for-profit community lenders. The loans, costs and eligibility requirements will vary between providers.

Can I get a loan if I receive benefits?

Some CDFIs consider applications from people receiving benefits, subject to their eligibility and affordability checks. Requirements vary between lenders.

Are Credit Unions cheaper than CDFIs?

Credit union loans can cost less than loans from CDFIs, but this will depend on the provider and the loan. Compare the total amount you’ll pay back before deciding which option is right for you.

What should I compare before taking out a loan?

Look at the total cost of the loan, the payments you’ll need to make, how long you’ll be making them for, whether you can pay back early without a fee and what support is available if your circumstances change.

Find Out More About Moneyline

If you’re looking for a small loan and want to see whether Moneyline could be an option for you, you can find out more about our loans and how they work before you apply.

Check out our homepage for more details on our small loans.