Unsecured vs. Secured Personal loan

Anonymous · ‎09-17-2015

I posted yesterday asking about a personal loan through wells fargo and whether or not that was a good choice based on my credit profile. I got 2 suggestions saying to try somewhere other than wells fargo, like a credit union. While I am exploring that option, I also wonder if a Secured Personal loan may be a choice. The amount of personal loan I am looking for I have in savings, but dont want to just spend the savings because I dont want to almost wipe out the account.

So the question is, how does a secured personal loan work? I read the basic information through wells fargo, and know the rates, and payment options. I am just wondering if its a sure thing? If I use say $4k to back a $4k secured loan, will they automatically approve me? Does it still get a HP, like an unsecured would?

Anonymous · ‎09-17-2015

Most secured loans are an automatic approval. As for a HP? Some do, some don't. I have a secured loan with a local bank, and they did not do a hard pull. An additional benefit of a secured loan is that the interest rate will be low. Mine is 4%. And, in my case, it's an interest only loan so it reports a really dinky monthly payment to the CRA's.

CH-7-Mission-Accomplished · ‎09-17-2015

@Anonymous wrote:
I posted yesterday asking about a personal loan through wells fargo and whether or not that was a good choice based on my credit profile. I got 2 suggestions saying to try somewhere other than wells fargo, like a credit union. While I am exploring that option, I also wonder if a Secured Personal loan may be a choice. The amount of personal loan I am looking for I have in savings, but dont want to just spend the savings because I dont want to almost wipe out the account.

So the question is, how does a secured personal loan work? I read the basic information through wells fargo, and know the rates, and payment options. I am just wondering if its a sure thing? If I use say $4k to back a $4k secured loan, will they automatically approve me? Does it still get a HP, like an unsecured would?

I answered you yesterday. I know this can be confusing at first.

Wells Fargo will almost surely do an HP on you, and run you ragged providing financial statements, verifications of employment, blood sample, DNA test and fingerprints. They are the WORST lender to deal with. It is amazing they have ever made a loan.

The share secured installment loan from a credit union is precisely what you are asking for. You simply tell them the amount you want, the loan, they write up the documents, have you sign and you are done. But do not make the loan for one penny more than necessary if you are just looking for a FICO score credit mix boost. In other words if you have 5K in your savings account, you get no more benefit opening a shared secured loan for 5K than you would for a $300 loan. And if you go to apply for a mortgage, they will count the loan payment in your debt, so it's much better to have a $10 payment than a $200/payment. None.

Call Alliant CU or State Dept. FCU. They DO NOT do hard pulls for membership or for share secured installment loans.

This is what you are seeking. Please get Wells out of your mind.

Even if you neded to borrow say 5K to pay off credit cards, I would always go to a CU rather than one of the big banks.

And I am telling you, and it is repeated over and over and over again in the various credit forums, WELLS FARGO IS THE WORST BANK TO DEAL WITH. (Excuse my shouting)

Anonymous · ‎09-17-2015

I saw your reply yesterday, and appreciate that.

@CH-7-Mission-Accomplished wrote:
@Anonymous wrote:
I posted yesterday asking about a personal loan through wells fargo and whether or not that was a good choice based on my credit profile. I got 2 suggestions saying to try somewhere other than wells fargo, like a credit union. While I am exploring that option, I also wonder if a Secured Personal loan may be a choice. The amount of personal loan I am looking for I have in savings, but dont want to just spend the savings because I dont want to almost wipe out the account.

So the question is, how does a secured personal loan work? I read the basic information through wells fargo, and know the rates, and payment options. I am just wondering if its a sure thing? If I use say $4k to back a $4k secured loan, will they automatically approve me? Does it still get a HP, like an unsecured would?
I answered you yesterday. I know this can be confusing at first.

Wells Fargo will almost surely do an HP on you, and run you ragged providing financial statements, verifications of employment, blood sample, DNA test and fingerprints. They are the WORST lender to deal with. It is amazing they have ever made a loan.

The share secured installment loan from a credit union is precisely what you are asking for. You simply tell them the amount you want, the loan, they write up the documents, have you sign and you are done. But do not make the loan for one penny more than necessary if you are just looking for a FICO score credit mix boost. In other words if you have 5K in your savings account, you get no more benefit opening a shared secured loan for 5K than you would for a $300 loan. And if you go to apply for a mortgage, they will count the loan payment in your debt, so it's much better to have a $10 payment than a $200/payment. None.

Call Alliant CU or State Dept. FCU. They DO NOT do hard pulls for membership or for share secured installment loans.

This is what you are seeking. Please get Wells out of your mind.

Even if you neded to borrow say 5K to pay off credit cards, I would always go to a CU rather than one of the big banks.

And I am telling you, and it is repeated over and over and over again in the various credit forums, WELLS FARGO IS THE WORST BANK TO DEAL WITH. (Excuse my shouting)

I got your reply yesterday, and appreciate that. I was simply asking about the secured version of their loan, wondering if this would be a viable option. No, I am not seeking the loan for a credit mix boost. While I do not currently have any installment loans on my credit report, my reason for seeking one is for a large purchase. As I said, I could just practiically wipe my savings out to make the purchase, but that would be the absolute last resort. As for getting Wells out of my mind, I do wonder what makes them so bad. I have banked with them for over 10 years, have checking, saving, retirement, and credit account through them. I have seen negative opinions of them on these forums but I have not had a negative experience.

Anonymous · ‎09-17-2015

One more question if you don't mind explaining. You mention share secured installment loan through a credit union. Would that be like the savings back loaned I was refering too? As in I would have to move $5k to the credit union, to get them to fund the loan?

CH-7-Mission-Accomplished · ‎09-17-2015

@Anonymous wrote:
One more question if you don't mind explaining. You mention share secured installment loan through a credit union. Would that be like the savings back loaned I was refering too? As in I would have to move $5k to the credit union, to get them to fund the loan?

Yes, you would deposit say 2K into a savings account at the credit union. You sign the papers at 3% interest for however long you want. They give you back your 2K. You can deposit it into the same savings account or get a check. So now your savings account has 4K in it and you can spend 2K right now. As the principal is paid down, that 2K security amount is released a little each each month.

If you go with Wells, things might well go just fine. They put me through hell for a HELOC for 100K for a house remodel when my scores were 820.

When you are talking about secured loans, that means a mortgage, a car, a boat, RV or motorcycle. If you need money to say fix up your bathroom and you need 5K, that is just an unsecured loan and the rates will reflect an unsecured loan. They don't do a deed of trust for a 5K loan unless it's a vehicle.

Sounds like you really just want a short time unsecured loan. In that case, just shop rates. With high scores you should be looking at like 8% interest for unsecured loans of up to like 25K, assuming your income supports the payment and your loan is clean.

Anonymous · ‎09-17-2015

This is the secured Wells Fargo Product I am referring to:

Benefits of a Time Account (CD)/Savings Secured Loan

If you have a Wells Fargo Time Account (CD) or savings account, you can use it as collateral for a personal loan to get a lower annual percentage rate (compared to an unsecured loan) without touching your savings. Please note the amount in your collateral account equal to the full amount of the loan will not be available for use until the Time Account (CD)/Savings Secured Loan is paid in full.

Why get a Wells Fargo Time Account (CD)/Savings Secured Loan?

Immediate funding. You may access your funds the next business day after credit approval.
Preserve savings. You can continue earning interest on your savings and avoid early withdrawal penalties on time accounts (CDs).
Lower interest rate. You get a lower annual percentage rate by providing approved collateral (such as a Wells Fargo CD) to secure your loan.
Fixed term and rate. You know exactly how much you’ll pay each month, making it easy to budget.
Loan amounts from $3,000 to $250,000
$75 origination fee

It would be fully backed by my savings account, which is what I think you are saying the CU would offer?

CH-7-Mission-Accomplished · ‎09-17-2015

@Anonymous wrote:
This is the secured Wells Fargo Product I am referring to:
Benefits of a Time Account (CD)/Savings Secured Loan
If you have a Wells Fargo Time Account (CD) or savings account, you can use it as collateral for a personal loan to get a lower annual percentage rate (compared to an unsecured loan) without touching your savings. Please note the amount in your collateral account equal to the full amount of the loan will not be available for use until the Time Account (CD)/Savings Secured Loan is paid in full.
Why get a Wells Fargo Time Account (CD)/Savings Secured Loan?
Immediate funding. You may access your funds the next business day after credit approval.
Preserve savings. You can continue earning interest on your savings and avoid early withdrawal penalties on time accounts (CDs).
Lower interest rate. You get a lower annual percentage rate by providing approved collateral (such as a Wells Fargo CD) to secure your loan.
Fixed term and rate. You know exactly how much you’ll pay each month, making it easy to budget.
Loan amounts from $3,000 to $250,000
$75 origination fee
It would be fully backed by my savings account, which is what I think you are saying the CU would offer?

This is PRECISELY what I was talking about. Credit unions offer the same product with no credit check, NO ORIGINATION FEE, and current interest rates around 3%.

I guarantee you that Wells will want 8% - 12% for the same loan.

Please take my advice and run from Wells for what you are asking to do!

Anonymous · ‎09-18-2015

WF charges an origination fee on a secured loan? Run the other way.