Share Secured Loans

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A share is synonymous with deposit. A loan secured or collateralized with a share account is collateralized with a deposit account at Your Legacy Federal Credit Union.

There are several advantages to pledging funds in a deposit account as collateral for a loan. Oftentimes, the interest rate on a share secured loan is superior to the interest rate offered with other loan types.

When a deposit account serves as collateral, the collateral that would have normally been pledged to secure the loan is not pledged as collateral, and therefore there is no claim on that asset.

Another advantage to pledging funds in a deposit account as collateral is a reduced loan fee. Other loan types likely carry more associated loan fees than what is associated with a share secured loan.

The final advantage to pledging a deposit account as collateral for a loan is that the hold on the account corresponds to the balance on the loan. As the loan pays down, the claim on the deposit account also reduces each month. Rather than a claim on the entire asset, such as with a vehicle or a home, the claim is basically equivalent to the remaining principal balance owed.

If you have funds on deposit with Your Legacy Federal Credit Union that exceed a loan need, you may want to consider a share secured loan as another way to put money back in your pocket.