Eastern Savings and Loans Credit Union

Eastern Savings and Loans is a credit union: a not-for-profit community lender that provides affordable loans and savings to its members¹. It serves members across the east of England, and its history shows in its name changes. It has previously traded as Cambridge Savings and Loans, Breckland Savings and Loans, Bury St Edmunds Savings and Loans, Broadland Savings and Loans, Babergh Savings and Loans, Attleborough Savings and Loans, Great Yarmouth Savings and Loans, Forest Heath Savings and Loans, Ipswich Credit Union and Ipswich and Suffolk Credit Union, so if you borrowed or saved with any of those local credit unions, you are already dealing with this one².

As a credit union, it offers the two products every credit union offers: savings and loans³. Members' savings are pooled and used to fund loans to other credit-worthy members of the credit union⁴. To borrow, you need to be a member, and some credit unions ask you to build up savings first⁵. This page explains how Eastern Savings and Loans' personal loans work, how your savings interact with your borrowing, what happens if you fall behind, how to complain, and how your money is protected.

What Eastern Savings and Loans offers

Eastern Savings and Loans provides the core credit union products: savings accounts and loans⁸. A credit union generally provides loans, savings, bank accounts and other services to its members⁹, and all credit unions offer savings accounts and loans⁸. In practice that means it lends money to members and holds members' savings, and it does not offer the high-cost short-term credit products that cause the most debt problems.

Credit unions are mutual organisations: the people who save with them are its members rather than customers of a profit-making company. Members' savings are used to fund loans to other credit-worthy members⁴, and credit unions describe their loans as suited to individual needs and at rates you can easily afford¹⁰. Because this site carries no rates, fees or limits for named providers, check Eastern Savings and Loans' own website, www.eslcu.co.uk², for today's figures on any product. For the wider picture of how these organisations work, see our guide to credit unions, and for borrowing generally, our guide to loans.

Savings with Eastern Savings and Loans

Every credit union offers savings accounts⁸, and saving with one is how the mutual model works: your savings, together with other members', fund the loans the credit union makes⁴. Savings in a credit union are held as "shares", which is the traditional credit union term for the money a member has deposited. All shares in an affiliated credit union are eligible for protection under the Financial Services Compensation Scheme⁴, which is covered in full near the end of this page.

Saving with a credit union tends to suit people who want a local, not-for-profit home for small or regular savings, and who may later want to borrow from the same organisation. Some credit unions ask you to build up savings before you can borrow⁵, so a savings account can be the first step towards a loan. For a full comparison of savings options across the market, see our guide to savings accounts.

Personal loans from Eastern Savings and Loans: how they work

A personal loan from Eastern Savings and Loans works like any other personal loan: you borrow a fixed amount and repay it over an agreed period. You need to be a member of the credit union to get a loan from it, and some credit unions ask you to build up savings first⁵. Others lend as soon as you become a member, and all check affordability by looking at the money you have left after paying your bills³.

How much you can borrow is usually linked to your savings. If you are a member of a credit union, you can usually borrow at least two or three times the amount you have in savings, depending on the loan policy of your credit union¹⁰. Another independent guide describes the same idea: credit unions allow you to borrow two or three times as much as you have saved, at a low interest rate⁵. Eastern Savings and Loans' own loan policy, and the amounts it will lend for, are on its website².

A common use for a credit union loan is bringing several debts together. With a debt consolidation loan, you work out how much you need to borrow to pay off all your debts, apply for a loan for that amount, and if approved use the money to pay back each of your creditors, leaving one monthly repayment to the loan lender¹¹. Building societies and banks may also offer personal loans for this purpose¹², so a credit union is one option among several. If you are considering this route, our debt guide explains the alternatives, including free debt advice.

How interest and repayments are worked out

Credit union loan repayments are typically calculated on your reducing balance, so you pay less interest with each repayment¹³. That means interest is charged on what you still owe, not on the original amount you borrowed: as the balance comes down with each payment, the interest part of each payment comes down too, and more of each payment goes towards the debt itself.

Under Eastern Savings and Loans' personal loan terms, the first payment is due one repayment period after the date of issue of the loan⁷. So if your loan is issued on the 15th of a month with monthly repayments, your first payment falls due one month later. The repayment schedule in your loan agreement sets out every payment date and amount.

The interest rate that applies to an Eastern Savings and Loans loan, and the total cost of any borrowing, depend on the amount, the term and its current pricing, which is published on its own website². What is consistent is the structure: fixed repayments on a reducing balance, with the first payment one period after issue⁷. For how rates and charges work across the whole lending market, see our loans guide.

Your savings shares are security for your loan

This is the feature of credit union borrowing that most surprises people. Under Eastern Savings and Loans' personal loan terms, as security for the loan you assign to the credit union all paid shares and payments on account of shares which you may have now or in the future⁷. In plain terms, the savings you hold with the credit union are pledged against what you owe it.

The practical consequences are worth understanding before you borrow. While the loan is outstanding, the credit union can hold on to your savings rather than letting you withdraw them freely, because those savings stand behind your debt. If you build up new savings during the loan term, those are caught by the same assignment⁷. And if you fall behind on the loan, the credit union may be able to use your savings to repay it, as covered in the missed payments section below.

This is different from a bank or building society personal loan, where your savings and your borrowing sit in separate accounts with no link between them. It is the trade-off for the mutual model: your savings support the loans the credit union makes⁴, and they also protect it if you cannot pay. If having access to your savings matters to you, ask Eastern Savings and Loans how much of your shares you can withdraw while a loan is outstanding before you sign the agreement.

Loan life insurance and what it covers

Most credit unions offer free life or loan-protection insurance with their loans³. When you borrow from a credit union you normally get free life insurance to cover the value of the loan, so the loan is repaid if you die before paying it back in full³. This means your family would not inherit the debt: the insurance settles what you still owe.

Whether Eastern Savings and Loans includes this cover with every loan, and any conditions attached, are questions for its own terms and its website². Where a credit union sells insurance it does not underwrite itself, the cover is provided by an insurer, and the credit union acts as the seller; the policy documents will name the insurer providing the cover. For the wider market, our protection insurance guide explains life cover, and our insurance guide covers the different types.

Loan life insurance is not the same as payment protection insurance. Life cover pays out on death to clear the loan; it does not cover sickness, accident or unemployment. If you want cover for being unable to work, that is a separate product, and it should be sold to you only if it is suitable.

Applying for a loan: credit, fraud and data checks

When you apply for a loan, Eastern Savings and Loans carries out the standard credit and affordability checks. Under its personal loan terms, it may make searches about you at credit reference agencies, who supply credit information as well as Electoral Register information, and those agencies record details of any search whether or not the application proceeds⁷. So even a refused application leaves a search footprint on your credit file. For what that means, see our guide to credit scores and credit reports.

To prevent or detect fraud or to assist in verifying your identity, it may also make searches of group records and at fraud prevention agencies, and pass information to financial and other organisations involved in fraud prevention⁷. This is standard practice across lending, and it is one reason applications ask for a range of personal details.

The credit union will also assess affordability. Credit unions check what you have left after paying your bills before deciding how much, if anything, to lend³. You can be turned down: a refusal usually means the loan was judged unaffordable on your income and outgoings, or that your savings history with the credit union is not yet long enough under its loan policy⁵. If you are refused, free help is available: MoneyHelper explains borrowing options, and debt charities offer free advice on managing your money before borrowing more.

What happens if you miss repayments

Missed loan repayments follow a broadly similar pattern across lenders, with one credit union specific step at the end. After one or two missed payments, you will get reminders; if you catch up, no further action should be taken and the missed payments may not be recorded on your credit file, though interest and charges, including late payment charges, will be added¹⁴. Extra charges are added if you miss payments¹⁵.

After three or four missed payments, the missed payments will be recorded on your credit file, and the lender will start considering other recovery steps¹⁴. For some types of borrowing, continuous non-payment can result in formal notices of arrears and, after 3 or 4 missed payments in a row, a default notice¹⁶. A default on your file makes further borrowing harder and more expensive for years.

The credit union specific step: if you miss payments on a loan, the credit union may be able to use your savings to repay the loan¹⁸. Because your savings shares are assigned as security for the loan⁷, money you hold with Eastern Savings and Loans can be applied against the debt. If you have a joint debt and an ex-partner was supposed to repay it, a missed payment is recorded on both parties' credit files¹⁹, so arrears can affect people who thought they were no longer responsible.

If you cannot make a payment, contact the credit union before the payment is due rather than after. Free debt advice from charities such as StepChange and National Debtline can help you work out what you can afford and negotiate with lenders; our debt guide sets out the options.

Borrowing while on benefits: how DWP deductions affect your budget

If you repay a loan directly from your benefits, the Department for Work and Pensions can take the money before it reaches you, and the rules on how much it can take matter to your budget. Deductions from benefits can be made from Universal Credit, Job Seekers Allowance, Income Support and Pension Credit²⁰. Legislation also lists universal credit, jobseeker's allowance, employment and support allowance, and, except in prescribed circumstances, housing credit within the meaning of the State Pension Credit Act 2002, as benefits whose overpayments may be recovered²¹.

Two protections are worth knowing. The DWP can take more than the general limit if this would stop your fuel supply being cut off, and it can take more than the general limit if this would stop your eviction²². So where disconnection or homelessness is at risk, higher deductions are allowed. But the limits cut the other way too: the DWP can still make debt deductions even if your Universal Credit is already too low to live on because of the benefit cap²².

There is also a rule that can affect people with savings who claim means-tested benefits. Paying off a debt which does not need to be paid off immediately does not count as deprivation of capital, unless the benefit claimed is Universal Credit or the person is over State Pension age²³. In other words, for some claimants, using a lump sum to clear a debt early is not treated as deliberately spending down savings to qualify for benefits. This is a complex area: if it applies to you, get advice before acting, and see our benefits guide.

If your budget is already stretched by benefit deductions, borrowing more may not be the answer. Free debt advice, budgeting help from Business Debtline's guides on budgeting, saving and borrowing¹⁰, and emergency funding options described by StepChange⁵ are all available without charge.

How to complain to Eastern Savings and Loans

Start by complaining to the credit union directly, in writing, and keep a copy of what you send. A credit union has eight weeks to investigate a complaint and give you its final response⁹. If your complaint is about anything else with a bank or similar firm, the same eight week limit applies²⁴, and for complaints related to payments firms have 15 days to investigate and give a final response²⁵, so it is worth asking which deadline applies to your case.

If you are unhappy with the final response, or eight weeks have passed without one, take your complaint to the free Financial Ombudsman Service⁹. The ombudsman fills in a complaint form to start the process²⁶, and it can consider complaints from consumers as well as microenterprises and small businesses²⁷. Its scope includes lending: consumers who feel they have been given unaffordable credit, or that the lender acted irresponsibly in providing the product, may be able to complain to the Financial Ombudsman Service²⁸. The same is true of newer credit products: if you are unhappy with a lender's response to a complaint about deferred payment credit, you can make a complaint to the Financial Ombudsman Service²⁹.

In Northern Ireland, Consumerline can refer your complaint to the Trading Standards Service for investigation³⁰. The ombudsman route is free on both sides, and you do not need a claims management company to use it: firms that charge for complaints handling add nothing the ombudsman does not provide for nothing.

How your savings are protected

Savings with Eastern Savings and Loans are protected by the Financial Services Compensation Scheme. Official guidance states that loans and savings with credit unions are protected by the FSCS¹, and all shares, meaning savings, in an affiliated credit union are eligible for FSCS protection⁴. The FSCS is the UK's statutory compensation scheme: if a bank, building society or credit union fails, it steps in to repay depositors up to its limit.

One point of confusion is worth clearing up. A 2006 statutory instrument states that members' funds are covered up to a maximum of £31,700³¹. That figure comes from legislation dated May 2006 and does not reflect the current scheme: today's official guidance simply confirms that credit union loans and savings are protected by the FSCS¹.

Savings with Eastern Savings and Loans are protected up to £120,000 by the FSCS², and the credit union appears on the Bank of England's list of credit unions incorporated in the UK⁶. Its authorised status dates from 2 July 2002, and you can check it yourself on the FCA Register². For how the wider protection system works, including the ombudsman and the FSCS, see our guide to consumer protection.