10 Signs You Need A Cash Secured Savings Loan | Refresh Financial
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10 Signs You Need A Cash Secured Savings Loan

 Secured Savings Loan

A cash secured savings loan (also known as a credit builder loan) is a credit building program that requires no money upfront. Instead, the loan acts as the security funds. You receive the loan after you have paid it back - it's a backwards loan. Once you pay the loan down, you will have access to those funds, but the best part is that your cash secured savings loan reports to the credit bureau like any other type of installment loan. The longer you stay in the program, the more you build your credit score and the more savings you build for yourself!

But why would anyone need a secured savings loan if regular loans exist? Here are 10 reasons why:

1. You Have Poor Credit

- Applying for a loan at your financial institution will require a credit check. If your credit score is poor, your application will be declined. With a cash secured savings loan, your credit score is not a factor! We can approve you no matter what your credit score is!

2. Your Credit Card Is Maxed Out

- If you've maxed out your credit cards, and you're not sure how you're going to pay them back, consider a cash secured savings loan because, at the end of your loan term, you will have a chunk of money to throw at your debt.

3. You Want To Save Up For Something

- You can use the cash secured savings loan payout for anything you want! Use it to kick-start your savings for a new car, renovations or a vacation with the family. Who knows, maybe you'll use it to start saving for a down payment on a home!

4. You've Been Declined

- Are you being declined for credit cards, vehicle financing or cash loans? This is likely due to your poor credit score. Use your cash secured savings loan to boost your score so you can finally qualify for the credit products you want.

5. You're Looking At Buying Your First Home

- Purchasing your first home is expensive, especially in Canada, so you'll want to do everything you can to make it more affordable. A good credit score gains you access to better interest rates, so it makes sense to build your credit score up first before getting a mortgage. That way, you can save a ton of money on interest in the long term.

6. You've Declared Bankruptcy

- A bankruptcy will cause your credit score to plummet, but it's just the sort of thing that a cash secured savings loan can help you with! Make use of your secured savings loan and start building your credit back up, so that when your bankruptcy is finally removed from your credit report, you’ll be in great shape.

Want to learn more about rebuilding credit after a bankruptcy? Check out this free step-by-step guide!

7. You've Gone Through A Consumer Proposal

- Like a bankruptcy, a consumer proposal is going to act like an anchor on your credit score, but the credit building power of the cash secured savings loan can counteract this effect.

8. You Have No Credit History

- If you're new to credit, the most affordable way to start building your credit history is a cash secured savings loan. The loan is reported to the credit bureaus like a typical loan, and your regular, on-time payments will ensure you have a great credit score in no time!

9. You Want To Apply For Your First Credit Card

- Take a few months before applying for your first credit card to allow a cash secured savings loan to boost your credit score.

10. You're About To Take Out A Loan

- People with excellent credit get the best interest rates on all their credit products, so if you're about to take out a sizeable loan, you'll want to consider boosting your credit score as high as you can first, to ensure you get the best interest rate possible. You can do this with a cash secured savings loan.

As you can see, cash secured savings loans provide many advantages.

Check out our handy graphic below that explains the benefits of a cash secured savings loan:

 

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