topic Re: Navy Federal Share Secured Loan in Personal Finance

Navy Federal Share Secured Loan

Anonymous — Fri, 02 Feb 2018 15:43:53 GMT

I'm thinking of signing up for a Navy Federal shared secured loan at 2% interest. $250. 60 months term. Monthly payment is $4.38. Reports to all three credit bureaus. Total interest is about $12.

This is the most cost effective way to get an ssl that I have found. I can deposit the money and get the loan immediately. I don't have to hold the money in the savings account for 30 days and wait to get the ssl. The money is locked into the account and is released as the loan is payed off. No credit check.

This should work to improve my credit score. That's why I want the loan. Does anyone have a better alternative?

Re: Navy Federal Share Secured Loan

SouthJamaica — Fri, 02 Feb 2018 18:38:09 GMT

wrote:
I'm thinking of signing up for a Navy Federal shared secured loan at 2% interest. $250. 60 months term. Monthly payment is $4.38. Reports to all three credit bureaus. Total interest is about $12.

This is the most cost effective way to get an ssl that I have found. I can deposit the money and get the loan immediately. I don't have to hold the money in the savings account for 30 days and wait to get the ssl. The money is locked into the account and is released as the loan is payed off. No credit check.

This should work to improve my credit score. That's why I want the loan. Does anyone have a better alternative?

It's only going to really improve your scores if you can pay the loan down to 9% of the amount of the loan, and they don't advance the payment dates.

Re: Navy Federal Share Secured Loan

Anonymous — Fri, 02 Feb 2018 19:48:47 GMT

SouthJ is absolutely right. The key idea for the Share Secure Loan Technique working is the ability to pay off almost the entire loan very early in the life of the loan and yet still keep it open for the full term.

I encourage our OP to read the first two posts in that thread so that he understands what it is that he's trying to do. He can also glance through post 3 to see how it worked (step by step) at Alliant, though that CU no longer offers SS loans.

I'd be most grateful to our OP if he would open the loan and execute the pay down much as described in that thread. Then let us know if the paydown pushed his next payment due date out several years and if so how far. More than one person had success doing that in the past with Navy Fed. Specifically contributor Glen_M has reported success with them.

Re: Navy Federal Share Secured Loan

Anonymous — Sat, 03 Feb 2018 03:24:15 GMT

wrote:
SouthJ is absolutely right. The key idea for the Share Secure Loan Technique working is the ability to pay off almost the entire loan very early in the life of the loan and yet still keep it open for the full term.

I encourage our OP to read the first two posts in that thread so that he understands what it is that he's trying to do. He can also glance through post 3 to see how it worked (step by step) at Alliant, though that CU no longer offers SS loans.

I'd be most grateful to our OP if he would open the loan and execute the pay down much as described in that thread. Then let us know if the paydown pushed his next payment due date out several years and if so how far. More than one person had success doing that in the past with Navy Fed. Specifically contributor Glen_M has reported success with them.

The CSR from Navy Federal says the payment will be pushed back if I pay more than one month. If I pay 4 months, then my next SSL payment will be due in 5 months.

The previous CSR I spoke with was wrong. The $250 SSL is not available at a 60 month term. A $3000 SSL is available at a 60 month term, but I don't have $3000. At $250 and up to $500, it is a 6 month term. From $501-$1000, it is a 12 month term. The term increases from there as the amount increases.

It is also the savings APY of .25%+2% for 2.25% interest. So $250 at 6 months at 2.25% interest. Payments are $41.97.

My savings account was already set up but I did not have $250 in it. They took my $155 from a credit card today to make my balance $250 and signed me up for the SSL all in about 30 minutes. (I thought that was cool that they did all of that at the same time. They did not wait for the credit card payment to post first.)

They said the loan was approved after a 5 minutes hold. No hard inquiries. They said normally they mail a check for the $250 to me, but they made an exception and deposited the $250 into my checking account that I have with them while I was on the phone. (That was also cool of them.)

They said the paperwork should be complete next week, maybe by Tuesday. I will go online and pay down the loan then. I will report what happens.

Re: Navy Federal Share Secured Loan

Glen_M — Sat, 03 Feb 2018 03:58:33 GMT

wrote:
You can get a Shares Pledged Loan with NFCU in a few minutes. I got mine over the phone and it was very easy. The only pulls NFCU did for me were for membership, and when I opened a credit card. The lady you spoke to at the branch is probably just unfamiliar with them because the average person probably never gets one. The ladies I spoke to at the service center didn't 'bat an eye' at the mention of a secured loan or why I would want one - knew exactly how to get it done.

I described getting mine in the big thread on SSLs, it starts at 976:
http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secure-technique/td-p/4506756/page/98
Follow up's at 1028, 1044, 1072, 1147, 1150, 1198 the last one shows the end results. You might want to consider opening yours near the end of the month so you can predict when the results/effect will be seen on your report - that was the only quirk I noticed.

There are some limits on the length of the term if you're aiming for a small amount, but if you're willing to start big, you can get a much longer term than most others offer (up to 15 years). NFCU also has the advantage of not forcing you to muck around with an automated payment that you'll have to cancel.
...

It sounds like the OP may need to repeat the process in the not too distant future to maintain the scoring lift. If nothing else, this could just be one more reason to put away a bit of cash savings. That's a generally good fiscal tool to have on hand anyway. Given the mechanics of the SSL technique, most of it becomes available after a short time, so it isn't an onerous burden.

After making small monthly payments, just for the sake of peace of mind in maintaing activiy, I've seen the next due date roll ahead another month, still out in 2021.

Re: Navy Federal Share Secured Loan

SouthJamaica — Sun, 04 Feb 2018 12:48:14 GMT

wrote:
wrote:
You can get a Shares Pledged Loan with NFCU in a few minutes. I got mine over the phone and it was very easy. The only pulls NFCU did for me were for membership, and when I opened a credit card. The lady you spoke to at the branch is probably just unfamiliar with them because the average person probably never gets one. The ladies I spoke to at the service center didn't 'bat an eye' at the mention of a secured loan or why I would want one - knew exactly how to get it done.

I described getting mine in the big thread on SSLs, it starts at 976:
http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secure-technique/td-p/4506756/page/98
Follow up's at 1028, 1044, 1072, 1147, 1150, 1198 the last one shows the end results. You might want to consider opening yours near the end of the month so you can predict when the results/effect will be seen on your report - that was the only quirk I noticed.

There are some limits on the length of the term if you're aiming for a small amount, but if you're willing to start big, you can get a much longer term than most others offer (up to 15 years). NFCU also has the advantage of not forcing you to muck around with an automated payment that you'll have to cancel.
...

It sounds like the OP may need to repeat the process in the not too distant future to maintain the scoring lift. If nothing else, this could just be one more reason to put away a bit of cash savings. That's a generally good fiscal tool to have on hand anyway. Given the mechanics of the SSL technique, most of it becomes available after a short time, so it isn't an onerous burden.

After making small monthly payments, just for the sake of peace of mind in maintaing activiy, I've seen the next due date roll ahead another month, still out in 2021.

Repeating the process would mean another new account, which would mean (a) decreasing average age of accounts and (b) decreasing age of newest account, both drags on one's scores.

Re: Navy Federal Share Secured Loan

Anonymous — Sat, 10 Feb 2018 00:00:15 GMT

wrote:
wrote:
SouthJ is absolutely right. The key idea for the Share Secure Loan Technique working is the ability to pay off almost the entire loan very early in the life of the loan and yet still keep it open for the full term.

I encourage our OP to read the first two posts in that thread so that he understands what it is that he's trying to do. He can also glance through post 3 to see how it worked (step by step) at Alliant, though that CU no longer offers SS loans.

I'd be most grateful to our OP if he would open the loan and execute the pay down much as described in that thread. Then let us know if the paydown pushed his next payment due date out several years and if so how far. More than one person had success doing that in the past with Navy Fed. Specifically contributor Glen_M has reported success with them.
The CSR from Navy Federal says the payment will be pushed back if I pay more than one month. If I pay 4 months, then my next SSL payment will be due in 5 months.

The previous CSR I spoke with was wrong. The $250 SSL is not available at a 60 month term. A $3000 SSL is available at a 60 month term, but I don't have $3000. At $250 and up to $500, it is a 6 month term. From $501-$1000, it is a 12 month term. The term increases from there as the amount increases.

It is also the savings APY of .25%+2% for 2.25% interest. So $250 at 6 months at 2.25% interest. Payments are $41.97.

My savings account was already set up but I did not have $250 in it. They took my $155 from a credit card today to make my balance $250 and signed me up for the SSL all in about 30 minutes. (I thought that was cool that they did all of that at the same time. They did not wait for the credit card payment to post first.)

They said the loan was approved after a 5 minutes hold. No hard inquiries. They said normally they mail a check for the $250 to me, but they made an exception and deposited the $250 into my checking account that I have with them while I was on the phone. (That was also cool of them.)

They said the paperwork should be complete next week, maybe by Tuesday. I will go online and pay down the loan then. I will report what happens.

I paid down the loan to $15.06 and that extended my payment out to 08/18. It works.

Re: Navy Federal Share Secured Loan

bondsandloan — Sat, 10 Feb 2018 06:08:42 GMT

Do none of the secured loans with the banks with say Citi, Chase work like the ssl with Alliant? What's the usual issue with banks if anyone knows?

Re: Navy Federal Share Secured Loan

Anonymous — Sat, 10 Feb 2018 12:41:51 GMT

Most of the banks and CUs we have researched do not permit the borrower to pay off most of the entire balance at month 1 and keep it open for the full length of the loan. If you can find exceptions, please let us know!

Re: Navy Federal Share Secured Loan

SouthJamaica — Sat, 10 Feb 2018 18:27:10 GMT

wrote:
Most of the banks and CUs we have researched do not permit the borrower to pay off most of the entire balance at month 1 and keep it open for the full length of the loan. If you can find exceptions, please let us know!

My Chase auto loan did that.

Re: Navy Federal Share Secured Loan

bondsandloan — Tue, 13 Feb 2018 17:17:29 GMT

wrote:
Most of the banks and CUs we have researched do not permit the borrower to pay off most of the entire balance at month 1 and keep it open for the full length of the loan.

Hi that is correct - It is difficult to find one with this requirement.

However, in case this was not that important for me (just wanted an installment loan to report for like 12 months for a boost) - is there any cu/ bank you guys would recommend? But would prefer one without a hp. I wouldn't mind taking a $1000 loan and paying ~ $40 interest for the life I kept it.

I found the Penfed ssl at 2% (>500$ loan) to be good option but that has a hp for membership. Any options better than this for my requirements?

Re: Navy Federal Share Secured Loan

Anonymous — Tue, 13 Feb 2018 17:41:00 GMT

wrote:
wrote:
Most of the banks and CUs we have researched do not permit the borrower to pay off most of the entire balance at month 1 and keep it open for the full length of the loan.
Hi that is correct - It is difficult to find one with this requirement.

However, in case this was not that important for me (just wanted an installment loan to report for like 12 months for a boost) - is there any cu/ bank you guys would recommend? But would prefer one without a hp. I wouldn't mind taking a $1000 loan and paying ~ $40 interest for the life I kept it.

I found the Penfed ssl at 2% (>500$ loan) to be good option but that has a hp for membership. Any options better than this for my requirements?

The boost will end after you pay it off. You have no open loans of any kind right now, correct? Including installment accounts like a car lease?

Do you anticipate getting a "real" loan for something you really need -- like a car, for example? If so, when would that be?

Re: Navy Federal Share Secured Loan

bondsandloan — Tue, 13 Feb 2018 17:48:30 GMT

wrote:
The boost will end after you pay it off. You have no open loans of any kind right now, correct? Including installment accounts like a car lease?

Do you anticipate getting a "real" loan for something you really need -- like a car, for example? If so, when would that be?

OK understood. Correct no open loans of any kind right now, no installment loans like a car lease. No do not anticipate getting a "real" loan for anything in the future. Only possibility could be a mortgage in around 12/15 months.

Mainly want the boost and thicker file from the installment loan to get more credit cards in 6 to 12 months.

Re: Navy Federal Share Secured Loan

Anonymous — Tue, 13 Feb 2018 18:10:18 GMT

Your top priority should be developing a plan. The plan should include goals and steps to achieve the goals, with all the pieces working together.

You mention a desire to (possibly) buy a house in 12 months but also a desire to open multiple credit cards shortly before that. That's an example of two things working against each other, not together.

People here can help you put together a plan, but they'd need to know things like:

How many credit cards do you have now?

Is your credit card utilization in the 1-9% right now?

What are your three FICO 8 scores now?

When did you open your oldest account? Is that account still open?

Re: Navy Federal Share Secured Loan

bondsandloan — Tue, 13 Feb 2018 20:04:22 GMT

Excellent -thanks for your thoughts.

My main issue is my AAoA and that for my credit profile is mainly from AU. Cards as follows:

1. Chase Amazon - Util: 0%, CL:5K opened 06/2003; AU

2. Citi Prestige - Util: (<1%); CL: 28K; 02/2016; AU

3. Amex SPG- Util: 3%;CL:28K; 11/2017; AU

4.Discover IT Secured; Util: 0%; SL: 800; 02/2018; primary

5. Capital One QS: Util: 1%; SL= 10,000; 02/18; primary

INQ last 24 months: (EX: 2; EQ: 2; TU:1). Discover was with SP since it was a pre-approval

FICO 8 scores (as of 01/31/2018): EX: 756, EQ: 760; TU: 762

AAoA =<1month

Based on what I have read on myfico, a ssl can really help me in my situation, to thicken my file and keep my AAoA lower when I apply for new accounts in 6 to 12 months. Should I get a ssl? And if so, from PenFed or is there anyone else you suggest? I could keep an ssl for 24 months if need be though ideally I would like to pay total interest <$80.

My main aims are: (1) Get new credit cards though I can easily app for them after the mortgage; and (2) Get a mortgage as co-applicant with my wife (Her scores are great so she can get mortgage as sole owner too if need be: Fico 8 EX: 790; EQ: 788; AoOA= 17 years; AAoA = ~ 7 years; newest account: that SPG Amex; INQ (EX:1, EQ:1; TU:0))

If we get a mortgage as co-applicants, is the applicable score just her middle score (as the higher scored applicant) or an average of my and her middle scores?

Re: Navy Federal Share Secured Loan

Anonymous — Tue, 13 Feb 2018 20:36:56 GMT

The mortgage officer will look at your middle mortgage score (call it X) and your wife's middle score (call it Y). Then he will take the lower of X and Y.

I would allow the impending mortgage to drive all your decisions. You have plenty of credit cards now, so do not apply for any until after you own your new home. If your wife has only one or two cards, or none in her name, then there might be a case for her to apply for a card in the next few months.

Executing the SSL technique can't hurt at all, given your time frame. A lot of people think that it is a good idea to have shown that you can handle an easy loan before you apply for a major loan (car or home).

Trouble is that we don't have clear options for lenders. Navy is a a good choice and so would an Alliant unsecured loan. Remember that all inquiries lose all score impact after a year.

Re: Navy Federal Share Secured Loan

bondsandloan — Tue, 13 Feb 2018 21:05:43 GMT

wrote:
I would allow the impending mortgage to drive all your decisions. You have plenty of credit cards now, so do not apply for any until after you own your new home. If your wife has only one or two cards, or none in her name, then there might be a case for her to apply for a card in the next few months.

Thanks. That's all great information here. The cards I am an AU on, those are my wife's cards. That is she has 3/5 cards (in my original list) - Chase, Citi Prestige and Amex SPG and I am AU on all 3. And 2/5 cards are in my name - Discover IT Secured and Capital One QS and she is AU on none.

wrote:
Executing the SSL technique can't hurt at all, given your time frame. A lot of people think that it is a good idea to have shown that you can handle an easy loan before you apply for a major loan (car or home).

Trouble is that we don't have clear options for lenders. Navy is a a good choice and so would an Alliant unsecured loan. Remember that all inquiries lose all score impact after a year.

Thanks. I think the reason you haven't found that clear option is for the requirement "after making a bulk payment to 8.9% util, the payment date still remains (60-8)= 52 months in future, rather than bringing forward the payment due date.
@For some one like me this is not an extemely imp requirement (I only want a score boost and thicker file for when I go apply the mortgage in 12 months) and a $1000 ssl from PenFed @2% for 60 months term works- that I make min payment for 10 months, then pay down to 8.9% util and then pay min payments for another 5 months works. Cause by the time the loan comes as "paid" (around month 15) I would have gotten mortgage by then.
Is there any other option better than PenFed for me? Given what my requirement is, plus I don;t want to pay more than $80 of interest, and $0 loan origination and other fees.
I can't join NFCU and I don't know if I would get approved for the Alliant unsecured given my AAoA <1 month.
What do you think is my best ssl option?

Re: Navy Federal Share Secured Loan

bondsandloan — Tue, 13 Feb 2018 21:13:53 GMT

The other reason I ask for better option than PenFed (which required hp for membership) is that there is a small chance we might bring forward our home buying & might be looking for mortgage in ~7/8 month rather than the 12/15 months first mentioned.

Re: Navy Federal Share Secured Loan

Anonymous — Wed, 14 Feb 2018 17:00:44 GMT

@bondsandloanwrote:
The other reason I ask for better option than PenFed (which required hp for membership) is that there is a small chance we might bring forward our home buying & might be looking for mortgage in ~7/8 month rather than the 12/15 months first mentioned.

I suggest you research this on your own. Your situation is not terribly uncommon. Somebody has no loans now but plans on getting a very important loan (e.g. car or home) in the next 4-18 months and wants to get a score boost before they apply for it. (And also to create a clear trail of having managed an installment loan, possibly in case of a manual review.)

The person does not care about the loan staying open for 60 months -- their strategy will be to pay down to 8% 60 days before they apply for their "real" loan.

What they do care about is making sure that they don't have an extra hard pull. Some of these people also have a low score and could be rejected if they apply for an unsecured loan.

Thus somebody needs to do the legwork to find a CU for which all of the following is true:

(1) The CU offers SS loans.

(2) There is no hard pull to join the CU.

(3) There is no hard pull when you apply for the loan.

(4) It's not hard to join the CU (no onerous criteria for membership)

You'd be helping out a lot of people if you'd call around and find what you consider a safe option that meets all four criteria. If you do that, I'd love to post your research and then your experience with the loan in our Quest For An Alternative To Alliant thread.

Re: Navy Federal Share Secured Loan

Glen_M — Sat, 10 Mar 2018 02:44:20 GMT

@bondsandloanwrote:
Do none of the secured loans with the banks with say Citi, Chase work like the ssl with Alliant? What's the usual issue with banks if anyone knows?

Origination fees. Some of them probably do -- I know Wells Fargo does ($75). The problem with banks is that their main goal is profit, and they're going to take steps to ensure that they make some money -- which is part of why they charge an originaiton fee up front.

If you care enough about repairing your credit or raising your score, and you don't have other options, paying $75 for the service might be a worthwhile expense. That's part of why I took out a much larger than normal secured loan, and have left ~$300 of it to float along for the next few years -- I don't mind paying NFCU $20-30 in intrest for the benefit of a 30-40 point increase in my scores, and want to make it worth the effort for them too.