Review of London Mutual Credit Union: A Good Option for You?

As a credit union, London Mutual aims to provide access to reasonably priced financial services for its members. For instance, those needing a quick, short-term payday loan can benefit from using LMCU, as their CUOK payday loan service charges much lower interest rates than you’d typically be charged on a payday loan. Find out who can become a member, read about the benefits of joining LMCU and learn about their products.

Our Thoughts: London Mutual Credit Union Review

The London Mutual Credit Union (LMCU) gives members access to current accounts, savings accounts and loans with consumer-friendly rates and fees that are more affordable than you might find elsewhere. As a not-for-profit institution which is owned by its members, a credit union is able to provide more affordable loans. And profits made by LMCU are delivered back to members through a dividend on their Membership Account.

Members can even earn a dividend on money in their main savings account (called a "Membership Account"). For the unemployed, loans are available and benefits can be paid into a LMCU account to help members manage loan repayments and potentially put aside a small amount for savings. A few stand-out products in LMCU's lineup are payday loans and Christmas savings accounts.

Payday Loans. One area where credit unions such as LMCU shine is payday loans, because they charge significantly less than many alternatives in the market. According to the Money Advice Service, the interest rate could be up to 1,500% APR on a payday loan. LMCU, in contrast, charges 42.6% APR on payday loans. Payday loans are typically a few hundred pounds and are meant to be paid off in a month, although two to three months can be arranged if you need it. If you pay your loan later than the agreed date, LMCU does not charge any penalties or late fees—you only pay the interest accumulated on your loan on a daily basis.

Christmas and Holiday Savings Accounts. LMCU offers Christmas and Holiday savings accounts to help members save up money for these often costly events. Members contribute small amount of money throughout the year—the idea being small contributions made on a regular basis throughout the year will build up to a larger pot of money to use for a holiday or Christmas spending. For example, contributing £5 per week towards a Christmas fund would give you around £250 to spend free and clear (e.g., without building up credit card debt). Saving £10 per week would give you £500 for Christmas spending. While these specialized savings accounts are a great idea in many ways, be aware that LMCU doesn't pay the dividend on money in these savings accounts.

Who Can Join LMCU?

Credit Unions are meant to help people in a community with something in common. In the case of LMCU, you can join if you live or work in the London boroughs of Southwark, Lambeth, City of Westminster and Camden. More information about those joining through work can be found under Local Employer Partnerships. In addition, serving members of the British Armed Forces and all worshippers of the New Testament Church of God are able to join. Those under the age of 18 who meet the residency requirement can open a Junior account. With the exception of teen accounts, a member's identity and address can be verified online—with no affect on your credit rating.

  • Those who live or work in the London boroughs of Southwark, Lambeth, City of Westminster and Camden
  • Serving members of the British Armed Forces
  • the New Testament Church of God

How Long Does it Take to Become a Member?

It takes 5 to 10 business days to process a membership application.

Benefits of Using LMCU

Borrowing from a credit union may be cheaper than finding short-term loans elsewhere. By law, the maximum interest rate a credit union can charge is 3% a month, or 42.6% APR. This is significantly lower than the interest rate you might pay to a traditional payday lender. For example, you'd pay 8X more interest with a 1,500% APR payday loan over a month than with a LCMU payday loan.

Example: £400 payday loan paid back in 30 daysTypical Interest Rate (APR)Total RepaymentTotal InterestSaving on Interest
CUOK Payday Loan42.60%£412£12-
Typical Payday Loan1500%£496£96£84

In addition, LMCU loans don't incur arrangement fees or early repayment penalties.

Benefits of CUOK Loans:

  • Lower interest rates
  • No arrangement fees
  • No hidden costs
  • No early repayment penalty

Products Offered by London Mutual Credit Union

The primary products offered by LMCU are current accounts, savings accounts and loans. Below we give an overview of each product, including details such as eligibility requirements and interest rates.

LMCU Loans

LMCU lends money to those in a variety of circumstances, with the amount you are lent subject to your ability to pay back the loan. Typically, once you’ve repaid 1/3 of your loan you’re able to apply for a top-up loan, if you need the money. Loans can be taken out online once you're a member.

LMCU LoansLoan SizeInterest RateLoan PeriodRequirements
Gold£5,000 to £7,4996.9% APR6 to 60 months
  • Excellent credit rating
  • Take home salary income at least £1,500/month
  • Employed full time
  • Tenant or homeowner
Platinum£7,500 to £15,0005.9% APR12 to 60 months
PremierUp to £7,50013.68%Up to 5 years
  • Good credit rating
  • Working members
Booster & GrowthUp to £1,20042.6%Up to 18 months
  • Booster loans available to the unemployed
  • Growth loans available to those without a good credit record
CUOK£100 to £1,00042.6%One month
Home Owner Loan£15,001 to £25,0004.9%12 to 84 months
  • Excellent credit rating
  • Take home salary income at least £2,000/month
  • Employed full time
  • Homeowner
Saver Loan4.5%Up to 120 months

LMCU Current Accounts

Those with an LMCU current account can pay bills via direct debit, get a MasterCard direct debit card for withdrawing cash from an ATM and paying for goods and services where MasterCard is accepted, receive free "Insufficient Funds" alerts, make transfers (online or in branch) and more. Be aware, however, that accounts carry fee and you you may have to pay for ATM withdrawals and balances enquiries, depending on the type of account.

LMCU Current AccountsAccount FeeATM withdrawalsATM balance enquiries
Value Plus£1.18 per week/£5.12 per calendar month4 free per month, thereafter £0.60 per£0.50 per balance enquiry
Pay As You Go£0.92 per week/£4 per calendar month£0.60 per withdrawal£0.50 per balance enquiry
Advantage£2.08 per week/£9 per calendar monthFreeFree
EFreeno ATM withdrawals (branch withdrawals cost £1.50 each)n/a
TeenFreeFreeFree

LMCU Savings

All members get a Membership Account, which is a savings account that pays a dividend based on LMCU's earnings and the amount of money in your account. LMCU also offers Holiday and Christmas savings accounts to help members save up money for these costly events by contributing small amounts on a regular basis throughout the year to later use for a holiday or Christmas spending. Christmas and Holiday savings accounts do not pay a dividend, unfortunately.

LMCU Savings Accounts
Membership AccountThe main credit union account for all members, and where you receive a dividend
Christmas SavingsMembers can save from January until December, withdrawing the savings to pay for Christmas expenses. The money you contribute throughout the year is locked up so you won’t spend it during the rest of the year. There’s no dividend on Christmas savings
Holiday SavingsA separate savings account for saving money towards your next holiday. There’s no dividend on Holiday savings.
Junior SavingsFor those under 18 years of age

LMCU Branches

For more information on any of these products, see the London Mutual Credit Union's website. To see how the London Mutual Credit Union compares to others, you can take a look through our review of the London Plus Credit Union or London Capital Credit Union.

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