There are many types of loans out there. Some have such high interest rates and so many fees tacked on that they are undesirable. A Share Pledge loan, however, may be the answer.
Normally issued at a much lower interest rate, a Share Pledge loan from a Credit Union is a loan that is issued against the money that is your savings. Credit Unions offer low interest rates. Wayne Westland Federal Credit Union offers a rate of just 1.50% APR, the Annual Percentage Rate that defines how much interest is added to the total sum of the loan over time. In most cases, loan application and approval can be quick.
Depending on the Credit Union, there can be different terms so it is helpful to review all the fine details when taking out the loan. This is a secured loan, dependent on the money that is in the personal account. It is important to remember that for the given amount, the equivalent funds in the Credit Union account are frozen while the loan is being paid off. Each time a payment is made, an identical sum which has been frozen will be made available in the account.
While other types of loans can be given at the requested amount, a Share Pledge loan requires that there is enough money available in the account to back it up. With tools available online to calculate how long it would take to pay off a loan at a certain rate, it is easy to figure out how to pay it based on what you have in the account. You can then use a Share Pledge loan to your advantage by enjoying what you’ve purchased while keeping your savings intact.