What is a Certificate-Secured Loan?

A certificate secured loan is a loan provided through a credit union that is secured by the amount available on deposit in the borrower's share account. The funds are kept in the share for a specific period of time based on the terms of the loan. Depending on the credit union and their specific policies, a borrower may be eligible to receive up to 150% of the account balance. The money collects interest while in the account, which will offset the interest charged on the loan. This is one of many ways people can begin to build a good credit score. It works much like a personal loan and is available to help people with a variety of expenses. Check with the local credit unions in your area to see what the requirements and policies are in regards to a certificate secured loan. When the loan is paid off the certificate can be redeemed.

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