Darlington Credit Union

Darlington Credit Union is a member-owned credit union serving people who live or work in the DL, DH, HG, NE, SR, TS and YO postcode areas. It lends through personal loans, guarantor loans, top-up loans and a payroll deduction scheme loan, and it runs a Bills Account, savings accounts and a prepaid debit card. Membership is open to anyone aged 18 or over in those postcodes, and you have to be a member before you can borrow or hold an account¹.

It is regulated by the Financial Conduct Authority and authorised by the Prudential Regulation Authority, with firm reference number 213507³. Savings and deposits of up to £120,000 are protected by the Financial Services Compensation Scheme⁴.

Credit unions are customer-owned and run on a not-for-profit basis, which is why they exist: to provide fair and affordable credit to people who cannot always access mainstream lending, including those with a poor credit history⁵. Darlington Credit Union is one of a number of credit unions across the UK, and its membership is defined by a common bond, in this case the postcode area you live or work in⁷.

What Darlington Credit Union offers

The credit union's lending is built around four products. The personal loan is the standard borrowing route, with terms from 6 months to 5 years and repayments weekly, fortnightly or monthly¹. The guarantor loan is for borrowers who can provide someone to guarantee the repayments, with a minimum loan of £1,000 and a maximum term of 60 months². The top-up loan is for existing members who want to borrow more on top of an existing loan, and the payroll deduction scheme loan is for people who work for one of the credit union's payroll partners, with repayments taken from pay⁸.

On the savings and day-to-day side, it offers a Bills Account, a Christmas savings account, and a prepaid debit card that loads from your current account. The card comes in two versions, PAYG and Premium, with different pricing structures¹⁰. The Christmas savings account can be opened through online or mobile banking, by email or in person at the branch⁴.

Credit unions generally offer savings and loans to all members, and larger ones add products such as Christmas savings accounts, junior savings accounts, prepaid debit cards, cash ISAs and, in some cases, mortgages⁶. Darlington Credit Union's own range sits within that pattern. If you are comparing what is available more widely, our guide to credit unions explains how the sector works, and the loans section covers borrowing options across the market.

Guarantor loans: how they work

A guarantor loan is a loan where someone else agrees to pay it back if the borrower cannot. The guarantor is usually a friend or relative, and the lender agrees to lend on the basis that the guarantor can repay the loan in full¹¹. It is a type of consumer credit, and it is often used by people with a bad credit score or no credit history, such as students or people new to the country¹¹.

Darlington Credit Union's guarantor loan requires a savings balance to remain throughout the term of at least 100% of the outstanding loan balance². Applications are subject to its usual lending criteria, and the minimum loan is £1,000². The maximum term is 60 months, and repayments can be weekly, fortnightly or monthly².

Guarantor loans can be more expensive than some other types of credit because they often carry higher interest rates¹¹. Some lenders pay the loan money into the guarantor's bank account rather than the borrower's, so the guarantor forwards it on¹⁴. If the borrower enters a formal arrangement with creditors, such as a debt management plan, individual voluntary arrangement, debt relief order or bankruptcy, the borrower's liability is included in that arrangement but the guarantor remains fully liable and is expected to keep up the original repayments¹⁴.

How loan repayments and the save-as-you-borrow rule work

Darlington Credit Union asks borrowers to save as they borrow. On the personal loan, that means saving either 20% of your loan repayment amount or £20, whichever is the lower amount, alongside your agreed loan repayment¹. The same rule applies to the guarantor loan². On the payroll deduction scheme loan and top-up loans, repayments are split between the loan and savings, so by the time the loan is repaid you have built up savings to use as you wish⁸.

The savings built up this way are not locked away. On the personal loan, you can use them to pay off your loan early once you reach the threshold of 50% repaid, or leave them as a savings pot¹. There are no fees for early repayments on the guarantor loan².

For existing members taking a top-up loan, the existing loan plus the requested amount equals the total loan, and interest rates on existing loans do not change unless a top-up is requested¹. Across credit unions generally, members can usually borrow up to two or three times the amount they have in savings, depending on the individual credit union's loan policy¹⁵.

Who can join and borrow: age, postcode area and credit history

To borrow from Darlington Credit Union you must be 18 or over and live or work in the DL, DH, HG, NE, SR, TS or YO postcode area¹. The payroll deduction scheme loan has an extra condition: you must work for one of its payroll partners⁹. The current account and prepaid debit card require you to be 18 or over and already a member¹⁰.

Credit history matters, but credit unions are set up to help where mainstream lenders will not. They provide access to fair and affordable credit for people with a poor credit history, and they may be more willing to help people on a low income, with poor credit, or without a previous record of borrowing⁵. That does not mean approval is automatic: a bad credit rating makes borrowing more expensive and harder in general, and consolidation loans for people with poor credit exist but usually at higher interest rates¹⁷. Secured loans may be available to people with a bad credit history who would not get an unsecured personal loan, but they put your home at risk¹⁹.

If you are turned down, it is worth knowing what is on your credit file and how it is used. Our guide to credit scores and credit reports explains how to check yours, and the debt section covers what to do if borrowing is not the right answer.

The guarantor's role and what happens if you fall behind

The guarantor's commitment is serious. If the borrower fails to make payments, the guarantor is legally liable to pay back the loan¹¹. That liability can extend to everything owed, not just the missed payments²⁰. At Darlington Credit Union, if another member acts as guarantor they must hold a savings balance at all times of at least 100% of the outstanding loan balance, and they agree that their savings can be transferred to make loan repayments if the borrower defaults².

A credit check is carried out on anyone agreeing to be a guarantor, and that is added to their credit file¹³. Credit reference agencies do not normally record you as a guarantor if the original borrower keeps up their repayments, but they will if the borrower defaults and you are pursued²¹. Guarantors are usually expected to have a good credit history and a separate bank account from the borrower¹³.

If the borrower enters an informal arrangement such as a debt management plan, the borrower remains liable and the loan company can continue to take action if the guarantor does not maintain the original repayments¹⁴. If the borrower dies, a guarantor may become liable for the debts or losses incurred by the creditor, and where debts are in joint names or had a guarantor, the surviving person or guarantor becomes solely liable for them²².

Applying for a loan: Open Banking checks and same-day funds

Darlington Credit Union now uses secure Open Banking access as the primary way to review the last three months of bank transactions for loan applications¹. The access is temporary and read-only: the credit union states it does not have permanent access to your account and cannot make payments or changes⁹. If your bank does not support Open Banking, alternative documentation is accepted⁸.

The credit union says it introduced this to help protect members from document fraud¹. Once approved, the guarantor loan offers same-day payment: sign your loan agreement before 3pm and you have access to the funds the same day².

For the current account, existing members can apply by contacting the credit union or through online or mobile banking¹⁰. The Christmas savings account can be opened through online or mobile banking, by email or in person at the branch⁴. The prepaid debit card is ordered by email, by direct message through the app, or in person, and delivery normally takes between 5 and 7 working days¹⁰.

The Bills Account

The Bills Account is the credit union's current account, designed for receiving benefits or wages. It is a full account rather than a savings pot, and it comes with a prepaid debit card that you load from the account¹⁰. To open one you must be 18 or over and already be a member of Darlington Credit Union, and existing members can apply by contacting the credit union or through online or mobile banking¹⁰. When your benefits or wages are paid in, you use your membership number as the reference¹⁰.

Credit union current accounts vary in the features they offer, and larger credit unions tend to offer more services such as budgeting accounts and debt management alongside the basics⁶. If you are weighing up whether a credit union account suits you, our guide to current accounts sets out how they compare with high street bank accounts, and MoneyHelper's guidance on opening, switching or closing an account covers the mechanics²³.

Complaints: how to raise one and when to go to the Financial Ombudsman

Darlington Credit Union's complaints procedure says you can call, email or write to its secretary, giving your membership number as a reference²⁴. It will acknowledge your complaint within five working days and aims to resolve it within eight weeks²⁴. If you send your complaint by email, the resolution is sent the same way; otherwise it goes by post to the address registered on its system²⁴.

If you are not satisfied with the final response, or the problem has not been resolved within eight weeks, you can refer your complaint to the Financial Ombudsman Service²⁴. The ombudsman is free to use. Its standard process is to ask you to complain to the company first, then, if you have no final response letter within eight weeks or you are unhappy with the response, to bring the complaint to it using its complaint form²⁵. The same eight-week rule applies to current accounts and to savings²³.

The ombudsman can look at how a lender or debt collector has behaved when dealing with your account, and complaints about Consumer Credit Act regulated debts can be escalated to it²⁶. It also handles complaints about how credit reference agencies have dealt with you, after their own complaints procedure²¹. In the first quarter of 2026/27 it opened 5,783 complaints about credit cards and 552 about debt collection, which gives a sense of the volume it handles²⁸. In 2025/26, 8,800 of its cases were about perceived irresponsible or unaffordable lending²⁹. If a creditor is harassing you, Citizens Advice explains what counts and what you can do³⁰.

FSCS protection for savings with Darlington Credit Union

Money held with Darlington Credit Union is protected by the Financial Services Compensation Scheme. All deposits of up to £120,000 are protected⁴. Credit union shares, which is what savings are called in a credit union, are eligible for the same protection, and loans and savings at credit unions are covered by the scheme⁴.

If you hold more than that with the credit union, the excess is not covered. The scheme exists to compensate customers if a financial firm fails, and it applies to eligible deposits automatically, so you do not need to register for it.

Darlington Credit Union is regulated by the Financial Conduct Authority and authorised by the Prudential Regulation Authority⁴. Its firm reference number is 213507, and it appears on the Bank of England's list of UK-incorporated credit unions³. The FCA Register lists its previous name as F.E.L. Credit Union Limited, and its permissions cover entering into regulated credit agreements as lender and accepting deposits³. You can check the register yourself using the reference number.