My Community Finance

What is My Community Finance?

My Community Finance offers loans to UK consumers, but the way they work is slightly different from traditional banks or many online loan providers. Rather than lending directly, My Community Finance helps borrowers access personal loans through UK credit unions for larger loan amounts and through a regulated small-loan provider for smaller borrowing.

This means the type of lending available through My Community Finance is typically referred to as a credit union loan. If you have only ever borrowed from high street banks or mainstream online lenders, the concept of a “credit union loan” may feel unfamiliar.

This review explains what My Community Finance does, how credit union loans differ from standard personal loans, and the main points to consider before applying. We also cover how safe this type of borrowing is, who it may suit, and when another option might be more appropriate.

What is a credit union loan?

A credit union loan is a type of personal loan offered by a member-owned financial organisation rather than a high street bank or investor-led lender. Credit unions operate on a not-for-profit basis, which means surplus funds are reinvested or used to benefit members rather than external shareholders. Although the structure is different behind the scenes, a credit union loan still works in a similar way to other personal loans. You borrow a fixed amount, repay it over an agreed term, and the loan is subject to credit checks, affordability checks and interest charges.

• Credit unions are member-owned and community-focused organisations.
• Surplus funds are reinvested or used to benefit members.
• Loans work in a similar way to other personal loans with fixed repayments.
• Borrowing is still subject to credit and affordability checks.

Credit union lending appeals to some borrowers because it is built around a community-led model rather than a profit-driven one. However, it is still a form of regulated credit and the rate and terms you are offered depend on your individual circumstances and assessment.

How My Community Finance works

Applying for a loan through My Community Finance starts with a free online eligibility check. You choose how much you want to borrow and for how long, then share some basic personal and financial information. The eligibility check uses this information to run a soft credit check, with no impact on your credit score, to see whether you are likely to meet the criteria of a lender on its panel, which includes credit unions and other regulated lenders.

My Community Finance is a broker rather than a direct lender. They manage the online journey and, if your details match a lender they work with, they show you a personalised quote with an indicative interest rate. If you decide to continue and the lender approves your full application, the funds are issued by that lender and your repayments are made directly to them.

• Start with an online eligibility check that uses a soft credit search to indicate whether you are likely to be approved and what rate you might be offered.
• Continue with a full online application if you wish to proceed, providing any extra information or documents the lender needs.
• If you are approved and accept the offer, the lender releases the funds and sets the repayment schedule.
• Your loan agreement is with the lender you are matched with, and you make your repayments to them, using My Community Finance’s portal to track your application where available.

For borrowers, this model means you make one online application rather than approaching each credit union or lender separately. This approach allows you to check your eligibility with multiple lenders through one journey, although approval is not guaranteed and each lender will complete its own assessment.

How repayments work

Repayments for a loan arranged through My Community Finance are made directly to the lender you are matched with, not to My Community Finance itself. Repayments are usually collected monthly by direct debit on an agreed date as set out in your loan agreement.

• Your repayment amount is fixed unless you make changes such as early repayment.
• Payments are normally taken by direct debit on a set monthly date.
• The repayment schedule is agreed when you accept the loan offer.
• You may be able to repay the loan early. If you request an early settlement figure, it will set out the outstanding balance along with any interest due up to the date of repayment.

What happens if I miss a payment

If you miss a repayment, the lender will usually contact you to let you know and to discuss the reason for the missed payment. Missing payments can lead to additional interest or charges depending on the terms of your agreement. It may also be reported on your credit file and could affect your ability to borrow in the future.

• Your credit file may show a missed or late payment.
• You may be charged extra interest or fees.
• Your ability to borrow in the future may be affected.
• Informing the lender early about your situation can help you understand available options.

If you think you may miss a payment, speaking to the lender in advance is usually better than waiting until the payment is overdue. They may be able to explain the steps involved or outline any support available based on your situation.

Who My Community Finance may suit

Credit union loans available through My Community Finance may appeal to borrowers who like the idea of a community-focused lender and prefer an online application journey. While suitability depends on your personal circumstances and the rate you are offered, there are some situations where this type of loan may be worth considering.

• Borrowers who want a straightforward online application with personalised rates.
• People who like the idea of borrowing through a member-focused or community-based organisation.
• Applicants who want to compare personal loan options in one place rather than applying to multiple lenders individually.
• Borrowers who meet the eligibility criteria and are comfortable sharing information to support affordability checks.

However, a credit union loan through My Community Finance will not be right for everyone. Eligibility requirements mean that some applicants, such as those who are self-employed or earning below £18,000 per year, may need to consider alternatives. It is also important to compare the APR and total cost of borrowing against other loan options to ensure it supports your financial goals.

My Community Finance reviews

Customer reviews can help build a picture of how borrowers found the application experience with My Community Finance. On Trustpilot, many reviewers mention a quick and straightforward online journey and clear communication throughout the application process.

• Positive comments often refer to an easy online application.
• Some reviewers highlight helpful communication and updates.
• Some reviewers mention receiving funds quickly after approval, although timeframes vary depending on the lender and the checks required.
• Experiences vary and outcomes depend on individual circumstances.

Not every review is positive and some customers mention that the rate offered did not meet their expectations or that extra information was requested during the process. This is a reminder to review any loan offer carefully, consider the total cost and make sure repayments are affordable before accepting. Your experience may differ from other customers, as rates, decisions and loan terms depend on your financial situation and the lender’s assessment at the time you apply.

Are credit union loans better if you have bad credit?

A credit union loan through My Community Finance is not automatically better for people with bad credit, and approval is not guaranteed. Credit unions still follow the same regulated checks as other lenders, including assessing your credit history, income and whether the repayments are affordable.

Some borrowers with limited or less established credit profiles consider credit unions because the lending model is member-focused rather than shareholder-driven. However, this does not mean lower rates or a higher chance of acceptance. The terms you are offered depend on your situation and the lender’s assessment at the time you apply.

If you are exploring borrowing with bad credit, it is important to compare the total cost, understand the eligibility criteria and think carefully about whether taking on new credit aligns with your current financial position. In some cases, alternative approaches such as reducing existing balances or improving your credit profile may be more beneficial before applying.

Alternatives to My Community Finance

A loan through My Community Finance is not the only option available. The right choice depends on your circumstances, credit profile and what you want the loan to achieve. Comparing loan options can help you find a loan that meets your needs and budget.

• Other personal loan providers that offer unsecured loans.
• Credit cards that may offer a lower cost for short term borrowing, such as 0% purchase cards, if the balance is repaid in full within the introductory period.
• Overdraft facilities arranged with your bank for smaller or short term needs.
• Lenders that offer options for self-employed applicants.

Before deciding, consider the total cost of borrowing, the repayment term and how confident you are that monthly payments will remain affordable. An eligibility check can help you understand your potential options without submitting multiple full applications that may impact your credit score.