24 Hour Loans glossary of financial terms

Building Society

A building society is a kind of mutual financial organisation that is technically owned by its customers (often known as its members). The purpose of building societies was originally to help consumers borrow money ? mainly to buy property. The money that might be borrowed for this purpose was taken from the savings of members who would in turn be paid interest for their savings.

As building societies are traditionally owned by their customers there are no external shareholders that need to be paid on the investments they hold. This means that building societies were cheaper to operate and could therefore offer lower cost loans options to their members than they might have got from a bank. In recent years many building societies have started to offer other banking products as well as loans and savings accounts. These can include current accounts, credit cards and different types of loans for example.