What is a secured shared loan?

Savings accounts are called shared accounts of credit institutions, due to the collaborative nature, owned by these organizations. When you give a loan using the stake funds as collateral, it is called secured loans in stock. Sharing secured loans can be a valuable tool to set up or rebuild your credit history. They are also useful for the consolidation of low-level debts and buy financing without actually tapping into your savings.

What is a secured shared loan?

How it works

In a secured loan by shares, credit unions put a clause hold on the amount you want to borrow. A minimum is usually located at 200 dollars to 500 dollars, while the maximum amount usually is from 80 to 100 percent of your shared account balance. Credit unions disperse the amount of loan as cheque or, more commonly, deposit into your cheque account. Depending on the policy of your credit unions, you pay the loan by automatically withdrawing from your cheque account, sending money directly or sending checks every month.

Funds available

The availability of the amount you use as collateral varies by the credit union. Some amount of money is increasing when you pay every month. Other credit unions require you to pay full loans before you can access the secured part of your balance. In both cases, your stock continues to earn dividends while the money freezes.


Loans that are secured in stock bring very little risk to the lender, so the interest you pay is quite low. Typically, the dividend rate you receive on your shared account is only 1 to 3% higher. This low-interest rate, plus constant dividend income on your escrow funds, reduces substantial loan costs, especially when compared to other forms of credit.


Basically, you are lending money to yourself, so eligible for a secured loan in stock is not a credit issue. This means that you will not be rejected because of a thin or inferior credit record, but your credit history can still have an impact on the interest rate and your loan amount. Other eligibility guidelines may include:

Membership with Credit Union
Minimum shared account balance
Willingness to disclose the purpose of the funds to any loan on $10.000, according to the Bank Privacy Act.

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