A Secured Loan is one of the best places to start whether you’re rebuilding credit from a financial stumble or just dipping your toe in the water. This is any type of loan where you give the lender collateral and they pony up the dough. Auto and home loans are the most well-known types of Secured Loans, but you can also use funds from your Savings.
SunWest offers four different secured options to give you the convenience of choice without the risk:
Securing a loan with your own funds is more often used to build credit, but it can also come in handy at other times too. Like when you’re saving with a specific goal in mind, but life gets involved, making things more complicated for you. Let's break it down with an example:
You have $5,000 in your Savings that you plan to use in a year or two toward a down payment on a home, but the air conditioning in your car goes out in the middle of July. You’ve got a few options:
Get heatstroke every time you’re making a quick trip down the road for a carton of milk. (Not recommended – super dangerous.)
Withdraw that chunk of cash from your down payment fund. (Set your home-buying dream back a little longer.)
Be your own lender.
Number three sounds pretty good, right? SunWest will put the amount you need for that AC on hold in your Savings, and give you the money for the repair in cash or a check. You’ll continue to earn dividends on the money that’s on hold to secure your loan, and your interest rate could be as low as 2.05%.
Low interest rate starting at 2% + current share dividend rate. To calculate your Savings Secured Loan’s interest rate just add 2% to the current dividend rate of the account you’re using to secure the loan. (Ex. 2% + .05% = 2.05% is your interest rate)
Max loan term of 24 months. Your Savings Secured Loan is designed to be short-term which will keep you on track to pay it off quickly.
Continue to earn dividends on the full Savings balance. Even though the funds are on hold to secure your Savings Secured Loan, these are still your funds, and you’ll still earn dividends on them.
No pre-payment penalty. While you’re only obligated to pay the minimum monthly payment, you can pay this loan off early with no additional fees.
Funds become available with each payment made. When you make a payment to your Savings Secured Loan, it’ll be reflected in the available balance of your Savings.
No credit check for current members. If you already have an account with SunWest, we will not pull credit to qualify you. Not a member yet? Open a SunWest membership, and we’ll only pull your credit during the account opening process. We can review your report with you and process your Secured Loan on the same day without another credit pull.
The process for a CD (Certificate of Deposit) Secured Loan is very similar to a Savings Secured Loan, with the exception of longer term options:
Certificate Secured Loans give you the flexibility of a longer loan term than a Savings Secured Loan. Certificate Secured Loans can be financed as far out as the Certificate maturity date.
There's still no credit check for members.
You're still instantly approved.
Call our Loan-by-Phone Department or come see us at any of our 8 branches to apply for a Savings Secured Loan, a Certificate Secured Loan, or a Credit Builder Loan.
Loans have a minimum deposit requirement of $500, but $500 is still a chunk of change that not everyone has lying around. That doesn’t mean we can’t help you crack the code to credit. Open door number 4 to reveal the SunWest solution:
Pay a one-time setup fee of $25.
We’ll add a Certificate of Deposit (commonly referred to as a "CD") to your account for your choice of $500 for a 6-month term, $1000 for a 1-year term, or $2000 for a 2-year term.
The funds go on hold for the term of the CD at a loan interest rate of 2% over the current CD dividend rate.
You make monthly payments that get reported to your credit.
Once the loan is paid off, the hold vanishes and the money is yours.
Building credit doesn’t have to be like building a house from scratch. All of our employees know you have to start somewhere, and these 4 options give you a successful framework for a credit profile that’ll hold for years to come. If you’re not sure which of our options is best for you, schedule an appointment to speak with one of our Branch Representatives. They can chat with you about your specific situation and help get you on the right path.
*APR = Annual Percentage Rate.