Is a share secured loan right for you?
Share secured loans are perfect for first time borrowers or those trying to repair their credit history. This loan is one that uses the assets in a savings account as collateral for the loan. When approved for a secured loan, the amount in your savings account is equal to the loan is frozen for the term of the loan. The money becomes available in your savings again as the loan is paid off.
Some lenders may freeze the total loan amount for the entire term of the loan, while others may release funds in stages as you pay down the loan. In this case, the secured amount will decrease as you pay down the balance. Because of the secured loan, rates are very competitive. So, if you’re having trouble getting a low-rate personal loan, ask your credit union lender about a share secured loan.
Improve your credit history
A Presidents Federal Credit Union share secured loan can also help you to improve your credit rating if used responsibly. You can improve your payment history, an important factor in your score, by making all of your current payment on time. A healthier credit rating means more borrowing power in the future. A share secured loan may also add to your credit mix, which is another positive factor in your credit rating.
The benefits of share secured loans
· establish a credit history
· offer competitive interest rates
· improve your credit rating
· are convenient and easier to get
· help you from dipping into your savings
· used for any purpose
In conclusion, secured loans are easy to qualify for, even for those with fair or poor credit. Because they use savings as collateral, share secured loans offer little risk to lenders. For the borrower, it gives them an option of borrowing against savings and continuing to earn dividends rather than liquidating an account to make a purchase or pay an unexpected expense.
Finding the loan that’s right for your individual needs and situation is important. As with any loan, we encourage you to carefully consider the financial implications before borrowing. When you take out a secured loan you risk losing the assets you pledged as collateral if you don’t repay the loan.
When considering a share secured loan, there is information you will want to gather from the lender before deciding to borrow. Here are some questions to ask your lender:
· The interest rate of the secured loan
· Term of the loan
· All fees associated with the share secured loan
· Amount you are eligible to borrow
· Your monthly payment amount
· Collateral requirements
· How long it will take you to obtain the loan
Talk to Presidents Federal Credit Union today to discuss your needs and if a shared secured loan is right for you! Check out our website for loan rates, services, products, and more!
Cincinnati Credit Union – Presidents Federal Credit Union (FCU) is federally insured and backed by the full faith and credit of the United States government for all accounts up to $250,000.00. We have over 60 years experience and offer the best values with friendly customer service.