uf101 Posted November 18, 2005 Report Share Posted November 18, 2005 My BK was recently discharged and I am now looking to get a secured loan (with a CD as collateral). My bank will not even talk to me until 4 yrs have passed. Does anyone know if there is an institution out there that will work with me? My credit is horrible (of course) and before I begin the credit repair process, I want to take some other steps. Link to comment Share on other sites More sharing options...
uf101 Posted November 23, 2005 Author Report Share Posted November 23, 2005 BUMP Link to comment Share on other sites More sharing options...
Ahntara Posted November 23, 2005 Report Share Posted November 23, 2005 There is no pat answer to this. Each financial institution has their own rules and policies. Get out your phone book and make some calls. Try Credit Unions, they may be a little more lenient. All lenders are leery of borrowers just out of BK. They represent a huge risk. (You didn't say when your BK was discharged, but 12 mos is MINIMUM, unless you go "hard money"). Link to comment Share on other sites More sharing options...
LNY Posted November 23, 2005 Report Share Posted November 23, 2005 If the OP buys, say, a 3-yr CD and secures the loan against it, where is the risk to the lender? That's the whole IDEA of secured loans.OK, so your particular bank is stupid. If you're not in ChexSystems, open a savings account with a local savings bank or credit union (you don't have to close your other account). You then become their customer, putting you in better stead for future credit products. Put the amount you want to use to buy the CD into your new account. After a month or two, personally talk to someone at the bank about a personal secured loan, which EXIST for this purpose... taking the risk out of lending. Explain that you'd like to buy a CD and secure the loan against it. I got .25% knocked off my interest rate for opening a checking account with the same bank and agreeing to have the loan payments taken directly from it.The reason for using the CD as opposed to your savings is that it earns interest, which will offset about half the interest of the loan. And at the end of the loan period, you get to cash in the CD. Link to comment Share on other sites More sharing options...
jq26 Posted November 27, 2005 Report Share Posted November 27, 2005 "The reason for using the CD as opposed to your savings is that it earns interest, which will offset about half the interest of the loan. And at the end of the loan period, you get to cash in the CD."And it is a forced savings program. Something much needed for those who were recently insolvent (like me!). I think LNY is dead on. Secure the money in a CD or high paying savings of some kind. Then take the loan $ and dump that into HSBC 4.00% savings account. The sum of the interest you will earn on the two interest bearing accounts should offset the interest you are paying to the credit union. You may even come out ahead if you pay down the loan with other funds in the meantime. Then you'll have both monies when the loan balance is paid. I'd stay away from banks. They tend to be less forgiving to those of us with poor credit- and they charge more. Plus they will definitely pull your credit. Take your business to a good credit union. Link to comment Share on other sites More sharing options...
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