What’s the first thing you think when you hear ‘loan companies’?
High-interest rates? Sneaky hidden fees? Predatory lending?
While on the surface it may appear loan companies are here to help us out of sticky financial situations; the exact opposite can often be true.
Borrowing money at high-interest rates, combined with unmanageable repayment plans, can see people quickly finding themselves trapped in a cycle of debt. This in turn can lead to damaged credit scores, financial instability, and high levels of anxiety.
Community Banks take a different approach to lending. Here’s how:
5 ways community banks are different to other loan companies
1. Owned by you. Unlike traditional loan companies, community banks are owned and operated by its account holders – people who live and work in the same area. Account holders have voting rights and elect a board of directors. Every account holder has an equal vote regardless of their savings or loan balance.
2. More than just a credit score. Our aim is to provide fair and affordable loan options to all our account holders. We may be called community banks, but we don’t focus on credit scores. Instead, we take the time to understand a person’s individual circumstances before offering loans that work for them.
3. People over profits. One of the biggest differences between community banks and loan companies is our people over profits ethos. We’re not here to maximise profits for external shareholders, because we have no external shareholders to satisfy. As a not-for-profit cooperative, any surplus we generate is reinvested back into improving services and benefits for our account holders and the community.
4. A culture of saving. While loan companies are primarily driven by profits – focusing on generating revenues through interest rates and fees and charges – community banks are different. We care more about helping people build a solid financial future. When you take out a loan with Northern Community Bank, there is a minimum saving amount that builds up and acts as collateral against the loan. Account holders have been pleasantly surprised at how quickly this pot can build up.
5. Your Money Matters. Making the most of your money as the cost-of-living crisis continues to bite is more important than ever. Community banks are committed to financial education, offering hints, tips and tools to help people manage their finances better.
Do community banks have online banking?
One similarity community banks do share with loan companies is the use of technology to make account holders’ lives as easy as possible.
Managing your account could not be easier through our secure mobile app, with features including 24/7 withdrawals, account statements and a loan calculator.
If you want to learn more about what community banks have to offer and how they could help you find financial freedom, contact one of our team today.
