Commutation Loan

Who is this loan for?

This loan is for you if:

  • you work for an employer (see the list below) who will send us the loan repayment direct from your salary or stipend AND
  • you are a member of their defined benefit occupational pension scheme that includes a lump sum (known as a commutation)
  • you are intending to retire within the next three years
  • you looking for a personal loan between £5,000 and £20,000
  • the interest only repayments will result in the loan being more affordable
Loan Value Monthly Interest Only Repayment
£5000 £33.20
£7000 £46.40
£8000 £49.60
£9000 £55.80
£10000 £62.00
£12500 £77.50
£15000 £93.00
£20000 £124.00

Before you apply

The loan is given on an interest only repayment plan with the agreement between the parties that the principal (that is the amount of the loan) will be repaid in full on the retirement of the borrower (or three years from the date of the agreement whichever is the sooner date). The loan will usually be repaid from the "commutation" i.e. lump sum element of the pension. Like all Churches Mutual's loans, there are no penalties for early settlement. If during the three year period you decide to defer your retirement you can change the agreement to repay the principal but this would be at the Credit Union's standard lending rate for the amount at the time.

The following employers are currently part of the payroll deduction scheme:

  • Methodist Connexion
  • Methodist Ministers
  • Church of England
  • Church Commissioners
  • Church of England NCIs
  • Church of England Pensions Board
  • Church of Scotland
  • Crossreach
  • Church in Wales
  • Diocese of Oxford
  • Diocese of Salisbury MAT
  • United Reformed Church
  • RC Diocese of Westminster

If you are not an existing member of Churches Mutual please check your eligibility before completing the application form.

Have your bank statements ready

We will also need you to send in your most recent bank statement showing at least one month's transactions and proof of your income, if you regularly use more than one bank account please provide statements for those accounts, too. We will also need to see a copy of your most recent annual defined benefits pension statement.

See our FAQs if you're unsure how to send your statements to us.

Apply for loan