What is a CD or Share-Secured loan?

A Share-Secured or CD-Secured Loan allows you to borrow against funds you already have in a savings account or certificate (CD). The funds used to secure the loan are placed on hold and remain unavailable while the loan is outstanding. As you make payments and reduce the loan balance, portions of the secured funds are gradually released and become available again.

Because the loan is backed by your savings or CD, it typically offers a lower interest rate—generally 2% above the current dividend or interest rate earned on the account or CD. Share-Secured and CD-Secured Loans can be an excellent tool for building credit, establishing a credit history, or re-establishing good credit while continuing to grow your savings.