I have been a SAHM for 7 years now and as a result my credit has suffered. When I needed a loan to purchase my car last year, the rates I was getting from finance agencies were way higher than I was willing to pay. I went to my local bank, the Bank of Woodstock and talked to them about options. They told me about a program that they and other banks use to give loans to people using money they all ready have as collateral.
I have several CD's at this bank and they told me they could give me a loan against these CD's. The intrest rate on the loan would be 2% over the average intrest rate I was earning on all the CD's that were included in the loan. So if my average intrest I was getting on my CD's came to 5% then the intrest rate on the loan would be 7%. The fee they charge to set it up was $200.00. I was also allowed to choose the amount of time that I wanted the loan to be for allowing me to find a payment that I could afford.
This was a perfect option for me so I jumped on it. My money is all sitting in the bank earning intrest just like always and when the loan is paid in full I can do what I want with it. I have an intrest rate on my car that averages about 2% and I got to choose how long I wanted to take to pay it back. There are no fees for paying off the loan early and if I were to default on paying it back, the money would be taken out of my CD's.
When I got the loan from them, they wrote me a check that I took to the car dealer. It made it look like I was paying for the car in cash so it allowed me to make a really good deal with them. The car shows as paid in full and I have the title to my car in my possession and not a banks so if I ever needed it for anything I have it. Also with the loan being a personal loan and not a car loan, there is no manditory insurance requirement so I can have a higher deductable and the coverage I want, not what the finance company wants. I am not sure how many other banks offer this option or what the terms are but my bank did tell me that many other banks have similar programs as well.