A share secured loan is a great way to rebuild credit by proper use and on-time payments and establish credit history for members with no prior credit (e.g. a child).
If you would like to apply right now, please complete the form below:
What is a share secured loan?
A share secured loan is essentially a way for you to borrow, using your own savings as the collateral. Instead of using all your savings to make a purchase. You’re borrowing against that sum while your money stays in your account.
How does a share secured loan work?
In a share secured loan, we will place a hold on the amount you want to borrow against. When you apply for the loan, we will grant you the amount you requested in the form of a check, cash, or a deposit into your checking account. You can use those funds as you see fit. As you make payments, we will release the held funds to you as you pay down the principal balance of the loan.
What is the benefit of a share secured loan?
While there are many benefits to a share secured loan, borrowers without credit history or damaged credit who may not otherwise qualify for a loan stand to gain the most. Since the collateral for the loan are funds on deposit at MCLCU, we can grant instant approval without requesting a credit report.
Share Secured Credit Cards
A share secured credit card is another great way to establish credit history or rebuild credit.
If you would like to apply right now, please complete the form below:
What is a share secured credit card?
A share secured credit card is a type of credit card that uses funds in your savings as the collateral. To obtain a shared secured credit card a member should have at least $200-$1,000 on deposit above the required single share in their savings account which usually matches the credit limit of the card.
What is the difference between a share secured loan and share secured credit card?
With a share secured loan, payment and terms are fixed. When the payments are made there is a gradual reduction of principal over time and eventually the balance is paid in full which ends the credit cycle.
With a share secured credit card, instead of having predetermined monthly payments you use a line of credit with no determined end time allowing you to spend up to your assigned limit (the share secured amount).
What are the benefits of a share secured credit card?
A shared secured credit card is a powerful took for building and rebuilding credit when used responsibly. While payment history is the single biggest factor on your credit score, your “credit utilization ratio” is another major factor that affects your credit score. Most credit scoring models reward you for using only a small portion of your available credit. Experts generally recommend borrowing or using less than 30% of your credit limit. If you really want to maximize your credit score, you should shoot for a utilization ratio of 1% to 10%.
With an MCLCU shared secured credit card, you can get the credit building and rebuilding benefits along with never paying interest on purchases if you pay your balance off in full every month.¹
How do I get access to my deposit? When do my funds become available to me?
Since it is a secured credit cards there is a hold on the funds at the time of account opening. Once you have a track record of responsible payments you can request MCLCU release the hold on the deposit. Depending on your credit profile at the time of the request MCLCU may be able to release some or all of the hold.
¹ To avoid finance charges, you must pay your statement balance off in full every month by your due date. Grace period only applies to purchase transactions. Finance charges will apply on cash advances and balance transfers. For questions and complete details please contact a credit union representative at (708) 482-9606.