topic Re: Huntington Deposit Secured Loan in Personal Finance

Huntington Deposit Secured Loan

Varsity_Lu — Fri, 04 Apr 2025 23:27:36 GMT

Does anyone have one of these? It sounds like the PenFed SSL. What exactly is the purpose (other than a credit building hack) of securing a loan with cash on deposit?

Re: Huntington Deposit Secured Loan

AndySoCal — Sat, 05 Apr 2025 00:06:00 GMT

@Varsity_Lu @ To use a credit union as an example the interest rate lower. See below

https://www.langleyfcu.org/personal-savings-secured

You can brorrow upto the amount that is in the account.

Does this help.?

Re: Huntington Deposit Secured Loan

Varsity_Lu — Sat, 05 Apr 2025 00:19:25 GMT

@AndySoCal wrote:
@Varsity_Lu @ To use a credit union as an example the interest rate lower. See below
https://www.langleyfcu.org/personal-savings-secured

You can brorrow upto the amount that is in the account.

Does this help.?

Not really. I don't really understand why anyone would borrow money that they already have. And at a higher interest rate than what they are getting from their savings deposit. It would save money just to use the money you already have. Deposit $5k at 4%, borrow $5k at 8%. In the end you lose money. The Huntington option is not an SSL like Langley and PenFed, so there must be some reason to do this?

Re: Huntington Deposit Secured Loan

FicoMike0 — Sat, 05 Apr 2025 00:55:45 GMT

I didn't know Huntington offered that! It's mostly a cu thing.

The intended purpose is to help people who can't save, but can make payments. Suppose you managed to save a couple of thousand, after a lot of effort. Now an expense pops up that you could pay with this savings, but you don't think you will ever save it back. instead, you borrow your own money, at very low interest, pay the expense, then make monthly payments on the loan.

It makes as much sense as a Christmas club, do they still have those?

Re: Huntington Deposit Secured Loan

AndySoCal — Sat, 05 Apr 2025 02:57:40 GMT

@Varsity_Lu What interest rate would have to for an unsecured personal loan versus the secured loan?

edited to add

Here is a different credit union I belong to with the same type of loan

https://www.lfcu.org/personal/personal-loans/

Re: Huntington Deposit Secured Loan

Peterparkyr — Tue, 30 Dec 2025 13:31:36 GMT

Depending on the interest rate of the savings account and the interest rate of the secured loan, it's possible that the savings can earn interest that out paces the cost of the loan. You'd have to do the math, but that is the reason why people do it.