In general, these loans are priced 2 percent to 3 percent over the rate that you are earning on your CD.
My bank website does not state their rate on secured loans
I found this on another site
Lets say I have a 4% cd (yes, they were paying these just a few years ago)
Would that mean I would pay 6 to 7% interest on the loan
Or does it mean that I only pay 2 or 3 percent
Seems rather strange that if you want to make a car loan the credit union offers me 1.99% financing, but if I want to make a secured loan against a cd they would charge me 7%. I would think the secured loan is the safer investment for them, it should be less interest
Update:
Please assume the person will get the 1.99% financing – which they would
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I haven’t really kept track of interest rates recently, but it really caught my eye that your credit union is offering 1.99% car loans. Not that long ago, that kind of interest on a car loan was a special offer new car offer thru the car finance company and only folks with exceptional credit could qualify.
As to your question, you would pay the full interest on the loan and teh bank would pay the interest on the CD. In reality, a secured loan like this really only makes sense if you need the funds now or only for a short term and the CD has penalties for cashing in early.
Source(s): BD
A secured mortgage is given to you in opposition to a collateral akin to apartment, gold, stocks and securities and so on. In case, for those who default on making repayments then the lender can re-promote your collateral to gather the rest steadiness. It most commonly has a low curiosity price in comparison to the unsecured mortgage. It additionally lets you develop your credit score rating.