topic Re: Just applied for a share secured loan in General Credit Topics

Just applied for a share secured loan

Anonymous — Fri, 16 Dec 2016 19:10:58 GMT

Does anyone have any experience with this? I applied for a $500 share secured loan through my local CU for a 60 month term. If I pay it down to less than $100 right off the bat will my minimum monthly payment stay the same or will it adjust accordingly so I still get the full 60 months of reported payments? I applied for it because I paid off my car loan in April and my score still hasnt recovered much from losing my only installment loan.

How was your experience with a secured loan through a CU?

Re: Just applied for a share secured loan

Anonymous — Fri, 16 Dec 2016 20:24:57 GMT

Almost all the experience of the folks here who use the Share Secure Loan technique is with a credit union called Alliant. Here's a thread that describes the technique, how and why it works, and the step-by-step approach for using Alliant. You just need to read the first few posts.

http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secure-technique/m-p/4506756

The key issue is whether your credit union will let you pay off nearly all of it in the first few months but still keep it open for the full 60 months. If the answer is yes, then you're good to go. You just need to pay your balance down to $44, which is < 9% of the loan amount.

If the answer is no, then you have chosen the wrong CU. The technique is really based on paying off almost all the loan in month 1 but not all of it and keeping it open for the full term.

I assume that the new SS loan and your current car loan are your only two open installment loans?

The general experience of people using the technique with Alliant is very good. Typically a score boost of 30 points or sometimes more. Again, read the section called The Theory Behind the Technique so you understand how it works and what to expect.

Re: Just applied for a share secured loan

Anonymous — Fri, 16 Dec 2016 20:31:54 GMT

The share secured loan is the only installment loan i have that will be open once i open it. My car loan was paid off in April and my scores dropped about 30 points when it closed and i want those points back

Re: Just applied for a share secured loan

Anonymous — Fri, 16 Dec 2016 20:46:46 GMT

Sorry... I misread your original post as saying that you would be paying off your loan this coming April.

Well, as I said, the key issue for you is whether that lender will let you pay off almost all of it but keep it open. A more minor issue is whether that lender did a hard pull of your credit report. Alliant does not do a hard pull so that's another nice feature of going with Alliant.

The link I gave you should answer all your questions.

Re: Just applied for a share secured loan

Revelate — Fri, 16 Dec 2016 21:14:03 GMT

The vast majority of lenders will work for this.

There have been only two so far that did not... DCU is a glaring one and I forget the other unfortunately. Not common.

Re: Just applied for a share secured loan

SouthJamaica — Fri, 16 Dec 2016 21:55:15 GMT

@Anonymous wrote:
Does anyone have any experience with this? I applied for a $500 share secured loan through my local CU for a 60 month term. If I pay it down to less than $100 right off the bat will my minimum monthly payment stay the same or will it adjust accordingly so I still get the full 60 months of reported payments? I applied for it because I paid off my car loan in April and my score still hasnt recovered much from losing my only installment loan.

How was your experience with a secured loan through a CU?

It all depends on the credit union; different credit unions will handle it differently.

Re: Just applied for a share secured loan

Anonymous — Wed, 28 Dec 2016 03:18:17 GMT

I will be setting one up with NFCU come January. I'll post back to let everyone know if they allow paying most of it down and extending the next payment into the future. The CSR I spoke with said they didn't pull at all for a share secured loan.

Re: Just applied for a share secured loan

Anonymous — Wed, 28 Dec 2016 14:31:10 GMT

If you wouldn't mind, I'd be grateful if you were to print out the step-by-step guidance for Alliant and then take notes in the margin about your experience with NFCU. Curious to hear if there were any significant differences, and if so what they were.

Since so many people at the Forum are big NFCU boosters, it's nice that you are tracking what it is like to do this through them.