DES MOINES, IA / ACCESS Newswire / June 29, 2026 / / ACCESS Newswire / June 29, 2026 / If you need extra funds but are having trouble qualifying for financing, a share-secured loan may be an option. With a share-secured loan, you use the funds in your interest-bearing bank accounts as collateral when you borrow money. Keep reading to learn more about share-secured loans and how they work.
Share-secured loan vs. secured loan: What's the difference?
A share-secured loan is a type of secured loan. Let's explore some of the key differences.
Secured loan
What is a secured loan? A secured loan is a lump sum of money you borrow and repay with interest, backed by collateral. Collateral is a valuable asset like real estate or a car. The lender can seize the asset if you cannot repay the loan according to the agreed-upon terms.
Secured loans typically offer low interest rates and favorable repayment terms, making them an attractive option for individuals who need access to extra cash
Share-secured loan
A share-secured loan is a type of secured loan that uses the funds in your bank or credit union account as collateral. Like other secured loans, you repay a share-secured loan with interest over a set amount of time. The funds in your account are used to guarantee repayment of the loan in case you default.
Benefits of a share-secured loan
Share-secured loans are not a common option, but they can have several benefits.
Access to quick cash
Share-secured loans may be a good option if you need access to extra money and don't want to dip into your savings.
Easier qualification and lower interest rates
Like other secured loans, share-secured loans are usually easier to qualify for if you have less-than-perfect credit. They typically offer lower interest rates compared to unsecured loans.
Potential credit score improvement
Taking out a share-secured loan and making loan payments on time can help you build your credit history and boost your credit score. Enrolling in autopay is a great way to ensure you never miss a payment.
Disadvantages of share-secured loans
Share-secured loans have disadvantages, too. It's always important to carefully consider the drawbacks before applying for a shared-secure loan.
Uncommon option
Share-secured loans are typically offered by credit unions and small banks. You may not be able to get one through a larger bank or other lender.
Frozen funds
You can't withdraw any of the collateralized funds until the loan has been repaid according to the agreed-upon terms.
Risk of losing money
If you default on a share-secured loan, the financial institution that granted the loan can seize the money in the account used to secure it.
Who should get a share-secured loan
You may benefit from a share-secured loan:
If you have a low credit score or no credit history
If you want to work on making timely payments and improving your credit score without depleting your savings
If you don't qualify for other types of financing
You may want to consider alternative financing options:
If you are not confident you will be able to pay back the loan on time
If you qualify for other types of loans with more favorable terms
If you're seeking a loan amount higher than the amount you have in savings
If you decide to move forward with a share-secured loan, the best way to find a reputable lender is to research online and read reviews to find what works best for you. You can compare rates, terms and other essential features before making a decision. Additionally, speaking with a financial expert who can help you evaluate your options can be helpful.
Bottom line
If you're looking into a share-secured loan, carefully consider all your options and research the pros and cons before making a final choice. As with any significant financial decision, it's also a good idea to speak with an expert who can offer professional guidance before you move forward.
Contact Information:
Name: Nagarameshwar J.
Email: nagarameshwar.j@iquanti.com
Job Title: Director
SOURCE: OneMain Financial
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