Kernow Credit Union

Kernow Credit Union is a not-for-profit financial co-operative that operates for the community in Cornwall. It is a member-owned lender and saver rather than a bank: members put money in, and that pooled money is what the credit union lends out to other members¹. Its savings and loans are open to people in its common bond area, and it appears on the Bank of England's list of UK-incorporated credit unions².

For a saver, the practical points are that savings are held as shares in the co-operative, that any dividend is paid annually after the annual general meeting, and that savings are covered by the Financial Services Compensation Scheme³. For a borrower, the headline rules are that a standard loan is capped at three times your share balance, that you need eight weeks' membership with regular savings behind you, and that repayments run over a period of up to three years¹.

This page covers what Kernow Credit Union offers across its savings and loan products, how much members can borrow, how applications are decided, what happens to your savings while a loan is running, and how your money is protected. It does not quote interest rates or charges, because those change and are set out on the credit union's own site.

What Kernow Credit Union is

Kernow Credit Union describes itself as a not for profit financial co-operative, which operates for the community¹. That structure is common to credit unions across the UK, which are not for profit community lenders providing affordable loans and savings⁵. MoneyHelper puts it plainly: a credit union is a not-for-profit financial provider that helps people access banking products like bank accounts and savings⁶.

The co-operative part matters to a saver. Because members own the credit union, any surplus can be shared with them rather than paid to outside shareholders, and at Kernow Credit Union dividends are paid on your membership account annually, after the annual general meeting of the members³. The Building Societies Association notes that credit unions are run by members to benefit communities rather than to make a profit⁷.

Credit unions are not-for-profit, member-owned financial co-operatives: members pool their savings so that other members can borrow, and any surplus is shared with members rather than paid to outside shareholders¹. Services vary between credit unions: some offer savings accounts, loans, foreign exchange, prepaid debit cards and, at some, current accounts⁸. Kernow Credit Union's own range is savings and loans, with payroll deduction available for employees of participating employers⁹.

If you are new to the idea, our guide to credit unions explains how the model works across the UK, and the savings section covers how share accounts compare with ordinary deposit accounts.

Savings and share accounts

Savings at a credit union are usually called shares, because each member owns a share of the co-operative. Salford Credit Union explains the naming: to become a member you open a savings account called a share account, because each member owns a share of the credit union¹⁰. Dromore Credit Union makes the same point, that your savings are called shares¹¹.

Kernow Credit Union members can pay in by standing order, payroll deduction, or by paying in cash or cheques at service points³. That mix is typical. Across the sector, deposit methods include standing order and bank transfer, salary savings schemes, cash and cheques¹², and some credit unions run separate accounts for Christmas, holidays, junior savers and special occasions¹³. Where a credit union takes bank transfers, it will normally ask you to use a specific account name and a reference made up of your membership number and surname so the payment reaches your account¹⁴.

Payroll deduction is worth knowing about if your employer offers it. SaveEasy Credit Union describes it as a way for an employer to support staff saving directly from pay¹⁵, and Kernow Credit Union runs a payroll scheme for employees of participating organisations⁹.

Two practical points for savers. First, a credit union is not a bank: your money is pooled with other members' and lent out, which is why the protection arrangements below matter. Second, the dividend is not a fixed rate of interest and is not guaranteed; it is declared after the annual general meeting³. Our savings guide covers how accounts of this kind fit alongside ordinary deposit accounts, and the ISAs section explains tax-free saving if you are weighing up where to put money.

Loans: how much members can borrow against their savings

The central rule at Kernow Credit Union is that the maximum a member is eligible to apply for is three times their shares¹. For its standard loans, the maximum is expressed the same way: three times share balance¹. That is a multiple of what you have saved, not a flat ceiling, so the size of your share balance sets the size of the loan you can ask for.

The wider credit union sector works on similar lines. Independent guidance says that 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 that credit union's loan policy¹⁶. Other guidance puts it as up to two or three times the amount you have in savings, again depending on the credit union's policy¹⁷. Some credit unions publish flat maximums on top of savings, such as £35,000 above your savings subject to affordability, or £50,000 above the member's savings subject to the board's discretion¹⁸. Kernow Credit Union's published rule is the multiple, not a flat figure.

The interest rate on a credit union loan is capped, though you might need to have a certain amount saved with the credit union before you can borrow⁶. Kernow Credit Union does not publish its rates on this page; its own site carries the current figures for each loan type.

Who can get a loan: membership time and regular saving

For Kernow Credit Union's standard loans, eligibility is eight weeks' membership, with regular savings¹. Both halves matter. The membership period is short, but the saving has to be regular, not a single deposit.

That pattern is common. Slemish n tha Braid Credit Union recommends that members save consistently for a minimum of 13 weeks or three months before applying for a loan, though loans can be granted before that at the loans committee's discretion²⁰. Keep Credit Union lets you apply once you have been a member for three months²¹. Independent guidance sums up the sector position: some credit unions will lend to you as soon as you become a member, while others lend only after you have saved for a set period, and affordability is checked against the money you have left after paying your bills⁵. StepChange notes that some credit unions will ask you to build savings first²².

Age is a factor at some credit unions. Salford Credit Union lets members join from birth and become full members eligible to apply for loans after their 18th birthday¹⁰. Kernow Credit Union also runs a Loyalty Loan open to all members¹.

If you are weighing up borrowing options more broadly, our loans guide sets out how different kinds of borrowing work, and the debt section covers what to do if repayments are already a problem.

How a savings retention works while a loan is running

A retention rule is the arrangement that keeps some of your savings in place while you repay. At Kernow Credit Union, if you have a loan, any balance above the loan amount may be withdrawn, and any other savings are held until the loan is fully repaid⁹. For standard loans, the retention is a fixed pound amount set at a minimum of one third of the total loan, and that amount stays constant throughout the loan¹. For standard loans between £2,001 and £5,000, retention is percentage based, at a minimum of 33.3%¹.

Other credit unions take different approaches, which is why the terms of your own loan matter. South Herts Credit Union allows withdrawals from your share account while repaying, as long as your share balance does not fall below one third of your current loan balance, and provided you are not in arrears²³. Cardiff & Vale Credit Union does not allow withdrawals at all while a member has a loan²⁴. Capital Credit Union retains your shares up to the value of the outstanding loan and does not allow withdrawal of those shares until the loan and interest are repaid in full²⁵.

There is a second reason retention matters. Independent guidance warns that if you miss payments on a loan, the credit union may be able to use your savings to repay the loan¹⁶. So the savings held against a loan are not simply frozen; they are also the credit union's fallback if repayments stop.

Members are generally encouraged to keep saving while they repay. Fintona Credit Union says members are encouraged and expected to save, no matter how little, while repaying their loans¹⁹.

Repaying a loan: terms, extra payments and early settlement

Kernow Credit Union's standard loans are repaid by regular payments over a period of up to three years¹. Members can clear the balance of a loan at any time, and there are no charges for extra or early repayment¹.

That flexibility is standard across the sector. Croydon Caribbean Credit Union lets members pay off a loan early, make additional lump sum repayments or increase regular repayments without a penalty²⁶. Orchard Credit Union describes the same three options as a feature of its personal loans²⁷. Ulster Federal Credit Union and T.P.M. Credit Union use near-identical wording²⁸. Salford Credit Union states that there are no admin fees or charges for paying off a loan early³⁰.

Some credit unions collect repayments directly from salary, which keeps the payment consistent and removes the risk of a missed month²⁰. Kernow Credit Union's Family Loan works differently: the whole of your Child Benefit is paid to your account with the credit union, part of it is used to make the loan repayment, and a small amount is held in a savings account¹.

If you are comparing this with other ways of borrowing, it is worth knowing what the alternatives cost in practice. Payday loans are intended for small purchases before payday and are a markedly more expensive way to borrow³¹. Our loans guide covers the full range, and the debt section explains the free advice routes if repayments become unmanageable.

Topping up an existing loan

A top-up replaces what is left of an existing loan with a new, larger one, so you make one repayment instead of two. Pennyburn Credit Union describes it that way: you can apply for a loan on top of your existing loan balance, which means you pay back one loan repayment instead of two¹⁸.

At Kernow Credit Union, you may apply to top up and reschedule an existing loan at the discretion of the loan committee, and it is preferred that 50% of the loan has been repaid¹. In extreme circumstances, an application for a top-up will be considered when one third of the loan has been repaid, and in those circumstances the loan may be capped by the loan committee¹.

Other credit unions set their own conditions. Orchard Credit Union allows members to top up personal loans and its 70+ loan provided the current loan is not in arrears²⁷. Capital Credit Union explains the mechanics: a top-up sets up a new loan for the remaining balance plus the extra amount, paying off the old loan, and the new loan may have a different interest rate from your initial loan, and the term might be different too²⁵. That last point is the one to watch, because a top-up is a new agreement, not an amendment.

Applying for a loan: deadlines, documents and the weekly committee

Kernow Credit Union's Loans Committee meets weekly on a Tuesday, so all applications need to be in by midnight on Sunday in order to be assessed on Tuesday¹. That is the single most useful thing to know before you apply: a late application waits a week.

Decision times vary across the sector. Pennyburn Credit Union says you will typically receive a decision within one to two working days¹⁸. Salford Credit Union aims to give a decision within three to five working days of receiving all the information it needs³⁰. South Herts Credit Union says a decision can usually be made within three to seven working days²³. Fintona Credit Union notes that loan applications are generally considered by a loans committee that meets weekly¹⁹.

On documents, credit unions commonly ask for photo ID such as a passport or driving licence, a recent payslip, and three months of recent bank statements for each person or guarantor on the application²⁹. Proof of address dated within the last three months, such as a utility bill, bank statement or benefits letter, is also standard²⁰. For larger loans, some credit unions ask for current account or credit card statements, mortgage statements or confirmation from a mortgage lender, and proof of what the loan is for, depending on the amount and your credit history with the credit union²⁶. Some credit unions require a first time loan applicant to meet a member of the credit committee before any loan is issued¹⁹.

Kernow Credit Union's former name and what changed for members

Kernow Credit Union was previously registered as Kerrier & The Fal Credit Union Limited, according to the register entry for firm reference number 223115⁴. The register records the current name as Kernow Credit Union Limited, with the earlier name listed under previous names⁴. The firm holds permission to accept deposits⁴.

For members, a change of name at this level is an administrative matter: the firm, its reference number and its permissions are unchanged, and the register shows the same entry under the new name⁴. The credit union's own site uses the Kernow Credit Union name throughout, including on its loans, savings and payroll pages¹.

If you are checking whether a firm is genuine, the register is the place to look, and our guide to regulation and policy explains how the register and the regulators fit together. Our scams and fraud section covers how to spot a firm or a message that is not what it claims to be.

FSCS protection for Kernow Credit Union savings

Savings at Kernow Credit Union are protected by the Financial Services Compensation Scheme¹. The scheme covers loans and savings at credit unions⁵, and shares, which is what credit union savings are called, are eligible for protection³².

The protection is not unlimited, and it does not cover everything a financial firm might sell you. Credit insurance, for example, is not eligible for FSCS protection³³. If you hold other products with the credit union, check what is and is not covered rather than assuming the protection extends to all of it.

If something goes wrong with the service rather than the firm's finances, the route is a complaint to the credit union first. Firms have eight weeks to investigate and give you their final response, after which you can take the matter to the Financial Ombudsman Service⁶. Our guide to consumer protection sets out how complaints, the ombudsman and compensation schemes work together.

Contacting Kernow Credit Union and complaining

Kernow Credit Union's website is www.kernowcreditunion.co.uk, which is the address recorded on the register⁴. Its loans, savings and payroll pages sit on that site, and they carry the current terms, rates and application details for each product¹.

If you have a complaint, raise it with the credit union first. Under the complaints rules, the firm has eight weeks to investigate and give you its final response⁶. If you are unhappy with that response, or eight weeks pass without one, you can take the complaint to the Financial Ombudsman Service, which is free to use⁶. Our guide to consumer protection explains the process step by step.

If you are looking for a credit union other than Kernow, the trade body's finder tool and helpline can help you locate one that covers your area or your employer³¹. Our credit unions guide explains how to join one and what to expect.