BLACK STAR LINE
COOPERATIVE CREDIT UNION LTD
LOANS POLICY
Black Star Line Co-operative Credit Union Ltd offer loans exclusively to
credit union members.
Advantages of a Loan from Your Credit Union
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Black Star Line Co-operative Credit Union Ltd offers loans for a variety
of purposes.
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Credit Union loans are very flexible; you can borrow small or large amounts and
over different periods.
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The interest rate is fixed, so if general interest rates change your repayments will
not.
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Interest is charged only on the outstanding balance.
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There is no arrangement, set-up, or hidden fees.
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There are no charges if you want to pay the loan off early.
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The loans policy is applied equally to all members regardless of their qualification.
Black Star Line Co-operative Credit Union has an obligation to lend prudently and
productively, and to protect members’ savings. Maintaining a responsible balance
between savings and loans is central to the Black Star Line Co-operative Credit
Union’s philosophy.
COMPLIANCE
It is declared that the policy of this credit union to comply with the letter and intent of all
applicable laws of the Republic of Ghana. This policy is specifically intended to include all
facts of the granting of credit and making loans, the handling and processing of credit
applications, credit inquiries, information concerning interest rates, credit terms and
costs, earnings and penalties on shares and all other requirements of the Consumer
Credit Protection Act and associated regulations.
UNDERWRITING GUIDELINES
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All members of the Black Star Line Co-operative Credit Union shall be eligible to
apply for a loan from the Credit Union after they have completed 13 weeks of
regular saving. A loan will not be given on the basis of a sudden increase in shares
or savings.
Non members can apply for a Liberty Loan. Eligibility is determined by reputable
employment and bank status. Non members applying for a Liberty Loan must be
employed and have a current and valid bank account. Application for a Liberty
Loan must be accompanied with a recommendation letter from their employer to
support loan application.
All loans are subject to the availability of funds and the amount of shares and
savings held by a member
Members must be aged 18 or over to be granted a loan.
A guarantor maybe required if recommended by the Loan Committee. A member
must have saved on a regular basis over a 12 week period to be eligible to be a
guarantor.
The availability of loans and the ratio of loan to shareholding shall be adjusted from
time to time to adequately make use of accumulated savings for the mutual benefit
of all the members
We must point out that on pre-existing - condition limitation the following rules
apply:
a)
Savings and loan insurance carry a 6 month pre-existing condition
limitation, as standard.
b)
Each new share deposit/loan agreement a member makes is governed by
the 6-month pre-existing condition.
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Benefit will not be paid on the members outstanding share/loan balance if
death results from a pre-existing illness or injury for which medical advice,
consultation or treatment was received within 6 months prior to making a
share deposit/loan.
INCOME
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Evidence of income must be shown in each loan file except for share pledged loans.
Income must be verified either by check stub, verification of employment form, last
two years' tax returns or by telephone call to the employer.
Income from overtime must be averaged over the previous 12 months.
Income from commissions must be averaged over the previous 12 months.
OVERALL MONTHLY DEBT-TO-LOAN RATIO
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This ratio is computed by taking the proposed principal & interest (P&I) payment,
adding it to all remaining loan payments that will be due for at least six more
months, and dividing that figure by the borrower's gross income.
2. The overall monthly debt ratio shall not exceed 50%.
3. On first mortgage loans, this ratio shall not exceed 40% unless the L/V ratio is 70%
or less, but never to exceed 50% regardless of the L/V ratio.
4. Evidence of the debt-to-loan ratio calculation shall be placed in every loan file.
CREDIT REPORTING
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A credit report will be obtained from the local credit bureau on all loan types.
An existing report may be used with a second loan or add-on loan provided the
report is no older than six months.
The loan officer must verify the correct name, social security number, address,
employment and credit obligations to those items shown on the loan application.
Current bankruptcy is sufficient cause for credit denial. A dismissed bankruptcy
within the past 7 years is sufficient cause for credit denial. Any bankruptcy that
causes or has caused the Credit Union to receive less interest or principal is
sufficient cause for credit denial, unless that member has voluntarily repaid all
interest/principal due at the time the charge-off occurred.
Outstanding judgements and/or collections will be sufficient cause for credit denial
unless these items are satisfied via this loan.
APPRAISAL REPORTS
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Appraisal reports are required on all first mortgage and home equity loans.
Appraisals must be made according to the guidelines established in the Credit
Union's Appraisal Standards and Appraiser Qualifications Policy.
A report cannot be greater than one year old without being updated by a certified
and licensed real estate appraiser.
Appraisals made on an "as is" condition basis are acceptable as long as the house
is in a liveable condition.
LOAN APPLICATION
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All loans shall be applied for using the Black Star Line Co-operative Credit Union’s
approved loans application form which shall be easily available to all members.
Loans must not be applied for to service a loan from another lending institution
such as a bank or building society.
All details on the loan application form must be fully completed especially the
health declaration with the help of a member of the loans committee or other
competent member if necessary. Tellers on duty should not have to leave their
posts to assist members with the completion of loans application forms.
Members should be made aware that their loan will be processed within 14 days in
normal circumstances and, if approved, will be paid out during the following week’s
business.
Borrowers must be made aware that interest on all loans will be calculated and
start from the date the loan is issued.
All loans will only be paid out by cheque with the relevant member collecting it IN
PERSON, and signing a receipt for same.
Loan amounts are at the discretion of the Loans Committee.
When you sign your loan agreement, you are agreeing that the Black Star Line Co-operative Credit
Union may hold your savings as security against your loan. Therefore savings withdrawals are not
permitted from your Savings Account while you have a loan balance greater than your savings balance.
If your savings balance is greater than your outstanding loan balance, you can withdraw savings, but
only up to an amount which leaves the savings and loan balances equal.
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Members’ loan applications will not be accepted without one or all of the following
documents, which must be recent:
 1 month bank statements
 1 month wages slips,
 1 Utility bill
Non members utilising a Liberty Loan application will not be accepted without all of
the following documents, which must be recent:
 1 month bank statements
 1 month wages slips,
 1 Utility bill
A signed letter must accompany an application if it is presented by anyone other
than the applicant.
Loans can be taken out over a maximum period of 3 years for an unsecured loan
and 7 years for a secured loan.
No credit will be extended to any person who does not comply with all
requirements and qualifications of the Bye Laws and BSLCCU policies and
procedures
No credit will be extended to any person who has caused the credit union a loss or
who has not voluntarily repaid the loss or who is not voluntarily repaying the loss,
whether the loss was by bankruptcy or otherwise.
No officer or staff member of this credit union will, in any manner, discourage a
member from submitting an application for credit. This credit union will accept and
consider an application from any member who wishes to submit a request for
credit. Such requests must be in writing via the appropriate Credit Union loan
application form. Solely verbal requests will not be honoured.
The maximum amount that can be loaned legally is 50,000.00 Ghc.
The unsecured part of any loan shall not exceed 5% of the credit union’s total
shareholding/assets.
Loan applications/approvals are permissible via telephone and/or fax.
Loan applications/approvals via the Internet are also available.
All loans may be subject to credit checks.
Co-signers
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Co-signers may be accepted as additional collateral on a loan.
The co-signer must complete all requested information on the Loanliner loan
application and Guaranty Agreement.
The co-signer will sign the Guaranty Agreement and all applicable forms in the
presence of a credit union employee. The employee is required to obtain positive
ID from the co-signer and verify the actual identity of that co-signer.
If the co-signer signs the Guaranty Agreement outside the credit union office,
his/her signature must be notarized by a notary public.
The co-signer must be working or have annual income that can be verified. A
retiree is considered to be working.
The co-signer must meet the same underwriting requirements as the applicant.
Payroll Deduction
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Payroll Deduction is NOT considered collateral for a loan nor is it mandatory for
obtaining a loan.
LOAN REPAYMENTS
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The member must be made aware of the repayment schedule and the rate of
interest to be applied (e.g. 1.2% per 30 day month).
Repayments of loan will be agreed to suit budget and individual circumstances and
interest will be charged at 1.2% per month on reducing balance.
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The member must be advised that the first payment of their loan will be due 30
days after the loan has been issued and interest will be calculated accordingly.
Loans must be repaid on the 1st of each month as promised on this application
form and must be for the minimum amount stated, although more can be repaid if
desired. (If the 1st falls on a weekend then payments must be made on the Monday
after that weekend).
All repayments must be paid into a bank account specified by BSLCCU and the
member informs the Manager of payment and a copy of paying in receipt must be
given to the Manager to check and verify receipt of payment.
Members must take responsibility to ensure their passbook is updated regularly.
Whilst the loan is being repaid 75% of shares or savings must be kept in the
member's main account. If the member's loan account falls into arrears the Black
Star Line Co-operative Credit Union has the right to transfer shares to loan under
the Bye Laws of the Credit Union.
Repayment of all Liberty Loans will be collected direct from borrowers’ employer
and paid into a bank account specified by BSLCCU Ltd.
It is important that members continue to save whilst repaying a loan so a minimum
amount of 5Ghc must be saved each month whilst a loan repayment schedule is in
place.
If a member finds difficulty in repaying a loan, then he/she should immediately
inform the loans committee so that mutually acceptable alternative arrangements
can be made. “Courtesy, Care and Consideration” should work both ways, all
information is treated in strictest confidence.
REVIEW AND AUDIT PROCEDURES
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After each loan is closed and placed on the Credit Union's computer system, Credit
Union management will have each loan file reviewed and compared to the data
input to assure that all terms of the loan agree with the computer system.
Evidence of each review will be placed in the loan file.
The external auditors will verify annually with the membership each loan with aa
balance over ……… Audit confirmations will be mailed to a random selection of
members with loans under ………….
Management will utilise computer loan reports to monitor any changes to existing
loans.
SHARE PLEDGED LOAN EXCEPTION
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Loans made to the owner of the pledged share account.
a) There are no limitations on the debt ratio or credit report requirements.
b) This loan type is excluded from the debt ratio calculation in the event other
types of loans are made to the same member.
Loans made to a non-owner of the pledged share account.
a) The borrower must meet all the underwriting guidelines to qualify for a
share pledged loan when the shares belong to another member.
b) Loan amount limitations and credit report requirements apply as well.
LOANS COMMITTEE
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The Board of Directors will appoint at least three Credit Union members to the Loan
Committee.
Duties:
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The Loan Committee will give final approval/disapproval on any
loan that the Loan Officer has recommended or submitted for such
action.
The Loan Committee will recommend to the Board any additions,
deletions or changes to the types of loans being offered to the
membership.
The Loan Committee will submit a monthly report to the Board on
loans approved/disapproved during the month.
The Loan Committee may review at its option any loan files for any
reason.
The Loan Committee shall report to the Board any practices,
concerns or discrepancies that are in violation of this policy.
The Loan Committee will appoint one or more loan officers.
The Loan Committee will appoint one or more Loan Officers.
Loan officers shall be duly qualified either through in-house training and/or
previous experience.
Loan approval limits are restricted only as outlined in the Loans Policy
underwriting guidelines.
Loan Officer Duties:
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To conduct an initial interview with each applicant to determine the
purpose of and qualification for credit.
To collect all documents pertinent to each loan type.
To underwrite all loan applications based on the guidelines,
requirements and limitations set forth in this policy.
To approve or disapprove all loan applications based on the
underwriting guidelines.
To close, or to have closed, all approved loans within a reasonable
period of time from date of application.
To complete the "Denial of Credit" letter on all disapproved loans.
To provide to the Loan Committee loan closed data for monthly
reporting to the Board.
There shall be regular meetings of the loans committee which shall be enabled by
the Treasurer to view details of such account as is necessary in order to take
decisions with sufficient information.
All decisions shall be by simple majority vote. The minimum number eligible to
form a quorum shall be 2 and in this case all decision shall be unanimous.
The loans committee shall appoint from amongst their number a chairman and a
secretary. Minutes shall be kept of all business in a secure book designed for the
purpose.
Loans meetings should take the following format:
(a) Ascertainment of a quorum
(b) The appointment of a chairman for the meeting (in the absence of the
regular chairman)
(c) The approval of the minutes of the previous meeting
(d) Correspondence
(e) A report of loans issued since the last meeting
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Approval of new loan applications
(g) Arrears report
(h) Approval of arrears action
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The loans committee should meet weekly if possible but at least twice monthly and
the chairman should ensure that a report of their business is available for the next
regular monthly meeting of directors.
The members of the loans committee should take great care even in very trying
circumstances to keep the business of members using the credit facilities strictly
confidential.
The loans committee shall ensure that a regular analysis is made of any loans of
which the repayments are in arrears. This analysis should be in depth with the aim
of identifying at the earliest stage the formation of a “bad debt”.
The Loan Officers are the individuals within the Black Star Line Co-operative Credit
Union that administer the loans policy and procedures. The Loan Officers are all
volunteers and are authorised by the Board to determine the loans policy, and
authorising loan applications within the policy, subject to regulatory requirements
and the Credit Union’s rules.
Regular borrowers shall have a maximum loans/share ratio of 3/1. You cannot
withdraw shares lower than this level (i.e. 3/1).
Loans to Credit Union personnel, Board or Committee members will be underwritten in the same manner as that of the regular membership.
Loan Officers are prohibited from approving their own loan(s) or those of their next
of kin.
The final decision on any loan application is at the discretion of the Loans
Committee.
TYPES OF LOANS
The following types of loans are available:
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Personal loans
Liberty loans
Home equity loan
Vehicle Secured loans
Farm Equipment
Land (acreage)
Home Equity
First Mortgage
Top-up loans
Personal Loan
Eligibility
A member must be over 18 years of age and have saved regularly for a period of 12
weeks or 3 months minimum prior to applying for a loan. Terms and Conditions apply.
Each loan application is decided upon its own merits.
Interest
The interest charged on Standard Loans is 1.2% per month on the reducing balance of
the loan.
Applications
All applications for loans must be made on our approved loan application form. All
loans are presented to the Loans Committee for a decision, subject to funds being
available.
Amount
Members can apply to borrow up to three times their savings. The maximum repayment
period is 3 years, although loans for some purposes must be repaid over shorter periods.
Members must continue to save while repaying a loan.
Subsequent Loans
Members should repay previous loans through regular payments before applying for
another loan. However, the Credit Union recognises that on some occasions it may be
necessary to borrow again before an existing loan is paid off in full. On these occasions
your existing loan will be refinanced and a new loan granted for the increased amount.
The maximum total amount you can borrow is three times your savings balance at the
time of application, which includes the outstanding balance of your existing loan subject
to Terms and Conditions.
Liberty Loan
Eligibility
Liberty loans are designed for non-members and must be over 18 years of age and have
the potential to become a member and to save regularly. Liberty loaner is not eligible for
top-ups whilst a current loan exists. Terms and conditions apply to this loan.
Interest
The interest charged on Liberty Loans is 1.2% per month on the reducing balance of the
loan.
Applications
All applications for loans must be made on our approved loan application form. The form
can be collected from our main office or downloaded from our website. Liberty Loans are
usually approved within one week from the application date. Please be aware during
busy periods it may take longer to process.
We will also need to see at least two forms of ID and proof of your income e.g. bank
statement or wage slip.
Amount
The maximum amount you can apply for is 500.00.
The maximum repayment period is 1 year.
As a Credit Union we also give advice on Credit Union savings.
For further information please visit or telephone either branch.
H Loans
Eligibility
A member must be an owner occupier and live in Ghana and be over 18 years of age.
The Loan must be used for essential repairs to your home and is subject to terms and
conditions.
Interest
The interest charged on House Proud Loans is 1.2% per month on the reducing balance
of the loan.
Applications
All applications for loans must be made on our approved loan application form. The form
can be obtained from BSLCCU website or requested from our main office. We will also
need to see at least two forms of ID and proof of your income e.g. bank statement
and/or wage slip.
Amount
The maximum amount you can apply for is ??????? and the maximum repayment period
is 5 years. Members are also required to save regularly the minimum of ………… a month.
VEHICLE SECURED LOANS
Eligibility
A member must be over 18 years of age and have saved regularly for a period of 12
weeks or 3 months minimum prior to applying for a loan. Terms and conditions apply to
this loan.
Interest
The interest charged on Liberty Loans is 1.2% per month on the reducing balance of the
loan.
Application
All applications for loans must be made on our approved loan application form. The form
can be obtained from BSLCCU website or requested from our main office.
Amount
The maximum amount you can apply for is ??????? and the maximum repayment period
is 5 years. Members are also required to save regularly the minimum of ………… a month.
FARM EQUIPMENT
Eligibility
Interest
Application
Amount
LAND (ACREAGE)
Eligibility
Interest
Application
Amount
HOME EQUITY
Eligibility
Interest
Application
Amount
Mortgage Insurance:
Mortgage insurance must be used on real estate loans in excess of a 90% loan-to-value
(L/V) ratio. Mortgage insurance is optional on mortgage loans with less than a 90% L/V
should the loan officer feel the loan is too weak without it.
TOP-UP LOANS
Eligibility
Interest
Application
Amount
Please note: all applications are subject to a credit check.
FAQ
I am not a member yet, can I borrow money?
You may qualify for our Liberty Loan, please contact us for further information.
I do not qualify for a Liberty Loan, when and how much can I borrow?
After saving regularly for at least 12 weeks or 3 months, you can apply for a loan of up to three times
your savings.
How long can I take to pay it back?
The maximum period to repay a loan is three years, but policy may restrict the period for some loans.
For example, the maximum period for Liberty Loans is one year.
Can I apply for a loan before I have paid my last loan off?
Yes. You can apply for a top-up loan, but you will be expected to have shown a consistent record of
payment to your previous loan and paid off at least one third.
This does not apply to Liberty Loans.
How do I get my money?
You can collect a cheque from either office or the money can be sent straight to your bank account via
BACS (2-3 working days).
What about loan insurance?
As a Credit Union member, your loan is life insured at no cost to you up to the age of 79. This means
that your loan is cleared should you die, thus leaving no debts to your family (subject to terms and
conditions).