Our Commodo and Forces Finance Cards and Salaryflex products offer you the flexibility of a £2,000 overdraft, which you can use whenever you need to. Just to clarify, an overdraft is an agreed amount of money that is available for you to borrow whenever you need to.
Those overdraft products are eligible for employed members, aged between 18 and 74 years old, and working for one of the Employers we offer payroll deduction with.
The full list of the eligible Employers can be found here.
Members (employed or unemployed), who have a credit union current account can apply for a formal overdraft. LMCU will treat it as a type of loan and it will be subject to this Loan Policy. More information on this type of overdraft can be found here.
Like a loan, an overdraft is borrowed money that has to be paid back, and you will pay interest on the money you borrow.
The key differences between a loan and an overdraft are:
- Unlike a loan, an overdraft is agreed in advance. This means that you can get access to extra money as soon as you need it.
- You only pay interest on the money you borrow. So if you need to use £100 of your limit, you’ll only pay interest on that, not on the whole £2,000 limit. And you don’t need to use your overdraft at all right now, it won’t cost you anything.
- Your repayments are not always fixed, so you have more control over how quickly you pay it back. Bear in mind though that the longer you take the more interest you'll pay, so it's important to pay off the full balance as soon as you can.
Either way, many people find it reassuring to know that there’s a pot of money available to them to cover emergencies, just in case.
Our overdraft products are reviewed regularly (at least annually) to ensure that they meet the needs of members and are appropriate to the Credit Union’s financial situation and the requirements of the market.