A Savings Secured Loan is an excellent way to:
- Start credit if you have never had credit.
- Regain credit after having a problem with your credit.
- Borrow against savings that are pledged in time certificates.
This type of loan asks you to pledge your savings account as collateral, protecting the risk for the credit union when giving you a loan.
When you’re just starting credit or re-establishing credit this gives you a start at building your credit score by borrowing the money and making regularly scheduled payments to repay the borrowed money. If you have money locked into time certificates, many times the interest you end up paying on the borrowed money is less than the penalty you would pay on early withdrawal of these same funds.