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cathie54_gw

Certificate- Secured Loans Pros & Cons?

cathie54
13 years ago

Just wondering the Good, Bad & Ugly about something like this. I have 3 Active Credit Unions. Here is what ONE of them say: (I (XXX'd) out the name of the Credit Union)

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Certificate-Secured Loan

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A (XXXXXX) FCU Certificate-Secured Loan allows you to use the available balance of an (XXXXXXX) FCU share certificate as security for a loan. This option lets you continue to earn interest on your certificate while enjoying a low interest rate on the loan. Our Certificate-Secured Loan offers an excellent opportunity for Members without prior loan experience to create a history of consistent payments, which is important in establishing a good credit history.

Features

No application or funding fees

Flexible repayment options include lump sum, monthly, or monthly with a balloon

Loan amounts up to 100% of the available certificate balance

Certificate-Secured Loan Rates

(XXXXXX)FCU has a loan program which features a range of interest rates for some of its consumer loans. A rate is based on a variety of factors, including the applicant's credit rating and (XXXXX) FCU account history. The rates quoted are effective as of 11/16/2010 and are subject to change without notice.

APR = 2.5% above share certificate rate

Loan Amounts = Ask for Details

Terms in Months = Ask for Details

Up to 100% of available balance.

Credit Union Rates as of 11/16/2010

60 month - 2.37% Dividend Rate / 2.40% APY

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There's some language here that I'm wondering about also (mentione above):

" Our Certificate-Secured Loan offers an excellent opportunity for Members without prior loan experience to create a history of consistent payments, which is important in establishing a good credit history."

WELL, I do have years of loan/credit history. I have excellent FICO (800+)

Will this do something negative to my credit score if I were to utilize something like this?

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