Many Barbados banks are unwilling to lend to local tenants who are having trouble paying their monthly bills. One local credit union allows for personal loans with as little as 10 % of the amount secured by a deposit.
The Barbados Public Workers’ Co-operative Credit Union offers a unique loan product to members who need quick cash. It is not quite an unsecured loan, nor is it necessary a secured loan either.
Line of Credit
Members of the Co-op are entitled to apply for a line of credit that may be tapped whenever funds are short in the month. There is no balance unless funds are withdrawn from the credit line.
The amount of the line of credit approved depends on the amount of “free” savings maintained in a savings account. This is generally the minimum level that an account always maintains, less any minimum balance requirement.
For as little as $250 maintained in a savings account, a borrower may obtain a line of credit for up to $2,500. While the line of credit itself is unsecured, the amount approved depends on the amount maintained in savings.
This unique approach is a great way for responsible residents to be rewarded for their commitment to saving, while still protecting them from short-term financial crises that can lead to evictions or other undesirable penalties of nonpayment.
For savers with at least $500 in free savings, a line of credit of up to $5,000 can be approved. Larger limits are available for members with higher savings balances.
The flexibility of the account is pretty awesome. Account owners can use it much as they would a credit card, yet the interest rate is much lower. Once approved for an account, withdrawals may be made at any time without permission.
The Co-op also provides traditional unsecured personal loans that do not have the partial collateral requirement that the line of credit product has. Rates are currently as low as 15 % and monthly payments may be spread out to 11 installments.
Depending on the needs of each member, either product could work very well. By borrowing money during times of emergencies, the borrower can avoid the extra fees and embarrassment of missing debt payments or falling behind on rent and utilities.
Anyone interested in membership may contact the Barbados Public Workers’ Co-operative Credit Union at 246-430-5200. Membership is open to all permanent residents.