Joint PenFed SSL?

[Varsity_Lu]

Does PenFed offer joint SSLs? My wife and I are in the same boat loan-wise and it'd be nice to have only one fake loan instead of two. Does PenFed offer that? If so, do both people get the same boost from it?

[JoeRockhead]

I don't know the answer for sure, but being you're considering a SSL anyway it would be a good thing to try if you have a joint account you'll be using as collateral...  you know, for science and all.  If successful, it would make for great DPs for others. 

[FicoMike0]

Ditto @JoeRockhead 

[AndySoCal]

My guess would be that both you would need to become members of Pen Fed. The savings account that is going the account that secures the loan would  need to be joint account. I would contact Pen Fed to be sure of the correct steps. 

Also you may want investigate credit unions that are near you. I know of other credit unions that offer SSL loans as well.

[Kforce]

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@AndySoCal wrote:

Also you may want investigate credit unions that are near you.

I know of other credit unions that offer SSL loans as well.

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Be careful with this , many CU's have a secured loan however when one pays it down to the < 9%, the payment window is not pushed out like Navy and PenFed.  The loan time being extended and small payments over a long time window is what makes (Navy & PenFed) work.

Many others are just straight/fixed loans at a reduced interest because you are borrowing from your own funds.  When you pay down, the time to pay is not extended, and full monthly payment's are required.

[FicoMike0]

Ditto @Kforce 

I looked at others, as far as I know, penfed and navy are the only options. Many cus offer ssl, but they accelerate the loan term when you prepay. You take out a 60 month loan, prepay 91% and then have a 6 month loan. This defeats the whole purpose, having a long term loan paid to under 9%.

[AndySoCal]

@FicoMike0 @Kforce I think am either missing or I Am not understanding something here.  I will use me as an example. Let say I have 25000 in credit card debt. I decide TO USE THE SSL route to pay off the debt. I would open the savings account if not already open that would used to secure 25000 loan. I would apply for the loan and the loan is approved for let say 7 years or pick a term. If possible let say I can pay off the loan after six years. For me at least I will pay it off in full when possible. why because that money that is securing loan is earning a very low interest rate. I would rather put the money into an investment that is earning some higher than a quarter of one percent if that much. Yes I see and understand the repayment option that happens after paying off more than 90% percent is nice. Technically that money that is securing the money is losing money. Why ? Because the spending power of that money has not kept up with inflation it  has less spending power in post inflationary dollars. what am I missing.

[Varsity_Lu]

@AndySoCal 

Yeah, you are missing the point. You don't actually borrow money with an SSL and you can't use it to pay anything off. It"s a fake loan. You put $3,000 into an account, then immediately borrow $3,000 from the same bank for a 10 year term. You then withdraw the $3,000 you originally put in and use it to pay off $2,800 of the loan right away, leaving your loan balance at $200. That $200 gets paid off over the next 10 years. It's essentially just shuffling your own money around, but the bank structures it to look like a real loan that you are paying off over 10 years. You don't actually borrow money, but it looks like you do on your credit report. This product is only for those of us who don't have any real loans (car, mortgage, etc).

[AndySoCal]

@Varsity_Lu  I understand what you said and I understand how some people on the forum are using this type of loan. I was considering the possibility of taking out this type of loan. I  had a possible need where I could use it to pay for some work I was thinking about having done. I never took out the loan. 

[FicoMike0]

@AndySoCal 

Using the ssl as it was intended, is a bad deal. The idea is, say you have $1000 in savings. An expense comes up that you could pay with $1000. Most of us would do just that. However, some folks can't save money, putting aside $1000 was a miracle, but they can make payments. So, they borrow their own money to pay the expense, pay 2% interest for the privilege, and repay their savings as a loan payment to the bank. 

None of us here is doing that. We are using sort of a loophole with penfed and navy, they don't change the loan term when you prepay, which we do immediately. This leaves us with a tiny loan, at 2% for many years. In my case, $186, for 84 months. The payments, which don't start until 2030, are $25.xx, not enough to hurt your dti. The cost, $186 @ 2%, is less than $4 a year. No hard pull either.

Edit. I started with a $2100 loan, prepaid a few days into it. Penfed only requires the payment be $25 and will go as long as 142 months. You won't find any of that on the penfed website, this is an unadvertised (secret) loan. You have to call them. Navy requires about twice the amount and you have to explain why you want it for more than 60 months. They explain it on their website. Myself, I prefer the secret society approach. Sort of like the masons or Templars or the water buffalo lodge. No cute hat like Fred and Barney had.