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How to Talk to Your Teenager About Money — Even If You’re Bad at It Yourself

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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Talking about money may be complicated, but talking to a teenager about anything can be a minefield. Combine the two and you’ll almost certainly find yourself faced with eye rolls and resistance. But having open conversations about money can help foster a sense of financial awareness that will benefit your child in the long run.

And what if you’re hardly an expert yourself? Maybe your credit score has fallen in recent years or you’ve never successfully balanced your checkbook. All is not lost — with a little forethought, you can still impart financial wisdom through daily activities.

“There are so many opportunities to talk about money every single day,” said Nicole N. Middendorf, wealth advisor and CEO at Prosperwell, a financial planning firm. “When you’re out spending money, or the kids need equipment for sports, or even lunch money, you can discuss how to make money or where all the money is coming from.”

Make a list of broad topics you’d like to cover over time, and broach each subject when it seems appropriate. Creating these goals ahead of time can help you make sure you touch on all the financial concerns you want your child to be aware of without making them feel like they are being bombarded with parental demands.

What exactly should you discuss?

How to budget

Why it’s important: Budgeting is the cornerstone of a sound financial future. Yet, 34% of Americans said they don’t have a budget and, of those who do, 70% said they struggle to stick to it.

How to address it: Consider giving teens a fixed amount of money for lunch each week. If they want a more expensive meal or snack one day, they can opt to bring lunch from home another time. “Little lessons such as this go a long way in helping prepare for larger budgeting decisions in a few years,” said Brian Walsh, CFP and Manager of Financial Planning at SoFi, an online lender.

If your teen has a part-time job or side hustle, like selling artwork or babysitting, you can use their income to develop an more detailed budget. This can even work if you provide an allowance or cover the majority of your teen’s costs. “Even if the parents are paying for everything, it’s good to have kids work through a personal budget for themselves,” said Heather Reihs Keller, a volunteer instructor at My Money Workshop, a financial literacy organization serving the New York tri-state area.

Online checking accounts also make it easy for kids to have a record of their spending. But it’s still important to show teens how to track where that money goes. “Make sure teens understand the credits and debits and how things are going in and out of their accounts,” Middendorf said.

How to control spending

Why it’s important: Creating a budget is one thing, but learning to follow it is a whole new beast. According to a recent survey by Piper Jaffray, teens claim to spend $2,600 a year.

How to address it: Impart financial lessons while you’re shopping together, so teens can see smart money decisions in action. “If you’re back-to-school shopping, provide a set amount of money you’re willing to spend and teach your teens about trade-offs,” said Walsh. For instance, your teen can choose to buy a single pair of name-brand sneakers for $100, or – sneakers, a backpack, sunglasses and a shirt – by bargain-hunting and making smarter choices.

Reihs Keller also noted the importance of comparison shopping and how delayed gratification can pay off in the long run. “I try to never pay full price for anything,” she said, adding that she always looks for ways to save money on whatever she’s buying.

She recommended advising teens to shop online to find better prices on items they first spot in a brick-and-mortar retailer. Though she may be preaching to the choir — teens are becoming increasingly savvy about looking for savings online, with 50% preferring Amazon for their online shopping.

However, parents can help by introducing them to programs like eBates, which can help teens earn cash back on purchases when they shop online at select stores.

How to earn money

Why it’s important: While it’s good to let teens practice budgeting with money parents provide, you’ll also want to foster an appreciation for a hard day’s work. When teens start earning their own money, there’s a whole new set of financial lessons to teach.

How to address it: “Explain their paycheck and withholding taxes to them,” Middendorf said. “What seems like a lot of money, at first, may not be that much.”

For teens too young to work — or if job options are limited in your area — your teen can find other ways to earn money. “Help your teen develop a side hustle,” advised Walsh. “Help them think through creative ways [to earn money], such as mowing lawns, shoveling snow or selling unused goods.”

John O’Rourke III, vice president and Private Banking and Wealth advisor for First American Bank, in Coral Gables, Fla., also recommends paying for chores your teen can do around the house. “My siblings and I were paid our allowance at the beginning of the month, and a portion went right into our savings account for clothing. The rest was our ‘play money,’ for movies, candies, or toys.”

The trick to leveraging an allowance to teach teens about adult life? Show them that if they spend their whole allowance, they aren’t getting more money from you; they will have to find a way to earn more.

In adult life, this can translate into a tough lesson on frugality — or an incentive to find ways to make more money. “I learned to wash cars and mow lawns,” O’Rourke said. “It was a valuable lesson — hard at times, but valuable.”

How to save

Why it’s important: Of course, as the old adage goes, “It’s not what you earn, it’s what you keep.” Teaching teens the importance of savings can help set them up for a life where they aren’t living paycheck to paycheck. Instead, they will have a buffer for emergencies, investment opportunities, or even spur-of-the-moment experiences like trips and concerts. “If you can get your child into this habit from the start, you’ll be setting them up for future success,” O’Rourke said. “It’s empowering and comforting to know you have some money set aside.”

How to address it: “If there is a major purchase they want to make such as a trip, car or new phone, use it as an opportunity to help them plan ahead,” Walsh said. “If they are old enough, help them apply for a job and connect their earnings back to their savings goal.”

You can establish an online savings account and help them set up automatic transfers from checking to savings every time they get paid. “For every dollar they earn, encourage them to save 30 cents of it, and don’t put any limitations on the other 70%,” O’Rourke advised.

For teens who aren’t working yet, an old-fashioned piggy bank helps teach the concept of saving. “Spare change adds up quickly,” Reihs Keller said. Tie savings into a long-term goal kids can work for, whether that’s a set of high-end headphones, a car or college.

And don’t be afraid of instilling knowledge through small soundbytes. “Pay yourself first,” is a common mantra used by finance pros. Although cliches like this may elicit an eye roll or a groan, teens are likely to internalize these phrases, even repeating them to their own children years later.

How to pay for college

Why it’s important: “One of the biggest mistakes parents make is not speaking to their children about college costs and who is going to pay for it,” Middendorf said.

With student loan debt in the U.S. at nearly $1.6 trillion, not discussing how to pay for college is a huge oversight that can leave young adults in a financial hole when they should be getting ready to live on their own.

How to address it: “When you’re discussing college costs with your child, be very transparent and share the total investment being made into their education,” O’Rourke said.

If you’ve saved for them, either in a 529 plan or other savings vehicle, start by discussing how much has been put aside and helping them do the math to see how much of their tuition and living expenses is being covered. It’s important for teens to know how much they will need to earn, save, or borrow to make up the difference. Even if the picture is bleak, at least they will be prepared.

Also help them break down the total costs of student loans they might need to take out, and how long it will take them to pay off that debt. Once your teen realizes the financial costs and responsibility attached, he or she might decide to opt for a less expensive school or to spend two years at community college first.

Bottom line

Parents can find teachable money moments every day. You can have a family saving contest, putting money in glass jars to see who can save the most over six months, or have family game nights with old standbys like Monopoly where you can walk them through buying, spending and earning passive income.

Regardless of your approach, you can help your teens build a strong financial base by showing them how to budget, earn and save. Set an example by establishing these good habits yourself, and you may even find your own financial future looking brighter, too.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Dawn Allcot
Dawn Allcot |

Dawn Allcot is a writer at MagnifyMoney. You can email Dawn here

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Pay Down My Debt

6 Options When You’re Unable to Pay Your Debt

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Does it feel as if you’re drowning in debt? Do you consistently run out of money before the month is over?

You do have options when you’re unable to pay your debt, whether you’re behind on high-interest credit cards, a car loan, a personal loan, tax debt or even your mortgage.

First, remember you are not alone in accruing massive amounts of debt. Total consumer credit outstanding in the U.S. exceeded $4 billion in December 2018, up 5% year-over-year, according to a report from the Federal Reserve.

It’s important to take a step back, breathe and strategize a plan. You’ll want to create a budget to calculate your monthly expenses so you know how much you have left over to pay your debt. Consider ways you can cut costs or earn more money, perhaps with a part-time job or side gig. Do you have a hobby that can earn you extra cash?

If you study the numbers and realize you don’t have the money to pay your debt, there are steps you can take to get your financial life back on track.

What to do when you’re unable to pay your debt

Staring at a stack of unpaid bills can be stressful for sure. It’s important to open those envelopes so you know where you stand. Ignoring your debt is the worst thing you can do because the interest will continue to accumulate.

It’s also not a good idea to open a new credit card if you can’t pay your existing balances. This may be only a temporary solution to your outstanding debt. And you could face penalties, fees, collections calls and even a lawsuit if your new credit card debt goes unpaid. In a worst-case scenario, creditors can place a lien on your property or garnish your wages.

Instead, consider these six options you could take to better deal with your debt:

Communicate with your lender. Often, lenders are amenable to a payment arrangement if you can explain your circumstances, such as a serious illness, job loss or unplanned expenses resulting from the loss of a loved one. They may also waive late fees.

Check with your creditors to see if one or more of your cards carries credit protection. For instance, protect your total balance up to $20,000, American Express via Assurant®. This insurance allows you to stop payments temporarily while keeping your balance the same following job loss, loss of a spouse or disability. Terms may apply.

Make your payments late. A late payment of fewer than 30 days usually will not be reported to the credit bureaus or affect your credit score, although you will be charged late fees. Your credit score may drop again if an account is 60, 90, or 120 days late. At 150 days late, it could go into collections, which creates a significant event in your credit file. It could take a while for your credit score to recover and that account won’t be reported as “current” even if you pay off the debt. However, late payments may be better than no payments.

Prioritize certain debts over others. While it’s not ideal, juggling payments so that no bill is ever more than 30 days late can help prevent severe delinquencies on your credit report. It’s important to make sure that secured loans, such as a car loan or your mortgage is never more than 90 days late, because this could result in repossession or foreclosure.

Consolidate your debt. If you’ve managed to maintain a decent credit score, it may be possible to get a personal loan at a lower interest rate than your credit cards. With fixed monthly payments and a lower interest rate, you may be able to get out of debt faster. You might also transfer high-interest credit card balances to a card with a 0% introductory offer.

Consider a home equity loan, home equity line of credit (HELOC) or cash-out refinance. Forty-four percent of Americans say they would consider using their home’s equity to consolidate high-interest credit card debt. Using a home equity loan or HELOC to pay off credit card debt can be a smart solution if you make sure not to charge up your credit cards again and continue to make on-time mortgage payments. This can be especially beneficial if you can refinance your home at a lower interest rate so that your mortgage payments stay the same or even go down.

How to handle different kinds of debt

Not all debt is equal, and defaulting on some loans may be worse than others. Consider these different types of debt and how you may manage them.

  • Secured debt: Make every effort to keep secured debt, including mortgages and auto loans, current. If you fall behind, call your lender immediately. The U.S. government offers several programs to help homeowners avoid foreclosure.
  • Student loans: Some student loans may not be considered in default until they are 270 days, or nine months, late. However, going into default on a student loan is serious, and your lender may garnish your wages, tax refunds and any federal benefits to help cover the loan. It is important to take student debt seriously.
  • Tax debt: Tax debt can lead to wage garnishment, property seizure and even arrest. But the IRS has several programs established that could waive fees and help you make a payment arrangement. You should always continue filing your taxes on time and speak to the IRS or a tax professional for help.
  • Other unsecured debt: Your credit cards and other unsecured loans may rack up late fees and interest if you don’t make your payments, but you aren’t in danger of losing your home or vehicle if you can’t pay on time. This debt may not be as high of a priority as other types of debt. However, you should reach out to your creditors to try to negotiate a payment arrangement. It may not be as bad as you think.

If you are able to keep current on your payments, the order you pay down your debt could be reversed. For example, you may follow these three steps:

  • Tackle high-interest debt first to reduce how much you pay in interest each month and to get your debt under control
  • Focus on paying the minimum each month on lower interest loans, such as auto loans.
  • Put more toward savings or other debts when your higher-interest debts are repaid.

The above steps are part of the Avalanche plan of debt repayment, and is one way you can work on your existing debt.

However, you may find that repaying your debts with the lowest balances first keeps you motivated in repayment. This is known as the snowball method and works well if you are the type of person who wants to see small victories along your road to financial freedom.

Budgeting may be your key to long-term financial success

Once your debt is paid off, you’ll need a plan to maintain your financial health.

Track your expenses for a month to see how much you usually spend. Look for areas where you can cut back, perhaps by eating at home more often instead of dining out.

Create a list of your fixed expenses, such as mortgage and utilities. It’s easy to stay on top of these payments if you have the money available.

Be cautious of your discretionary spending. Allocate specific amounts for items like clothing, groceries and entertainment. Start building an emergency savings fund by stashing away a set amount — even if it’s only $10 or $20 — each paycheck. Then, stick to your budget.

If you use credit cards to take advantage of cashback rewards, make sure to pay off your cards at the end of each month so you won’t get hit with interest charges.

Paying off debt is not easy and it can be overwhelming. Take steps to get your debt under control, take the time to pay it off and then future-proof your financial future with a budget and an emergency savings account.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Dawn Allcot
Dawn Allcot |

Dawn Allcot is a writer at MagnifyMoney. You can email Dawn here

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Personal Loans

Best Lenders for Secured Loans

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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Are you considering a secured loan? A secured loan is one that is backed by collateral. For instance, an auto loan is backed by the car you are purchasing. If you don’t make your auto loan payments, your lender can repossess the car.

Other common secured loans include home equity loans and home equity lines of credit. These secured loans use your house as collateral. If you are carrying high-interest, unsecured credit card debt, you can use the equity in your home to get a secured loan at a lower interest rate.

Secured loans are also available to put cash in your pocket without tapping into your reserves. If you have a savings account, stocks or other investments, a secured loan can be a great way to build your credit history or consolidate your debt while holding onto your money.

Getting a secured loan to consolidate debt is a good idea as long as you don’t continue to use the credit cards you just paid off. You can enjoy a lower interest rate and one monthly payment, which can help you keep more of the money you earn and improve your quality of life.

If you are strapped for cash, you may consider other types of secured loans. Beware of secured loans with high interest rates, such as title loans or payday loans. These loans give you money based on a car you own or your upcoming paycheck, but they are often predatory in nature.

Some secured loans allow you to use the cash for whatever you’d like, while other loans pay the money you borrowed directly to the seller of your home or vehicle.

If you need liquid cash fast and have assets in your name, a secured personal loan can help you get the money you need.

LendingTree

Personal loans can help you consolidate your debt, buy a vehicle and pay for home repairs, among many other things. If your credit is good, you can obtain a low-interest personal loan and avoid putting up collateral for a secured loan. Check out LendingTree’s personal loan tool to see if you qualify for a personal loan.

LendingTree is unique in that you may be able to compare up to five personal loan offers within minutes. Everything is done online and you may be pre-qualified by up to five different lenders without impacting your credit score.

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LendingTree is our parent company. LendingTree is unique in that you may be able to compare up to five personal loan offers within minutes. Everything is done online and you may be pre-qualified by lenders without impacting your credit score. LendingTree is not a lender.


A Personal Loan can offer funds relatively quickly once you qualify you could have your funds within a few days to a week. A loan can be fixed for a term and rate or variable with fluctuating amount due and rate assessed, be sure to speak with your loan officer about the actual term and rate you may qualify for based on your credit history and ability to repay the loan. A personal loan can assist in paying off high-interest rate balances with one fixed term payment, so it is important that you try to obtain a fixed term and rate if your goal is to reduce your debt. Some lenders may require that you have an account with them already and for a prescribed period of time in order to qualify for better rates on their personal loan products. Lenders may charge an origination fee generally around 1% of the amount sought. Be sure to ask about all fees, costs and terms associated with each loan product. Loan amounts of $1,000 up to $50,000 are available through participating lenders; however, your state, credit history, credit score, personal financial situation, and lender underwriting criteria can impact the amount, fees, terms and rates offered. Ask your loan officer for details.

As of 17-May-19, LendingTree Personal Loan consumers were seeing match rates as low as 3.99% (3.99% APR) on a $10,000 loan amount for a term of three (3) years. Rates and APRs were based on a self-identified credit score of 700 or higher, zero down payment, origination fees of $0 to $100 (depending on loan amount and term selected).

LightStream

LightStream, an online consumer lending division of SunTrust Bank, offers secured loans for the purchase of new, pre-owned or classic vehicles, with a streamlined paperless loan process. Loans may even be processed on the same business day they are initiated.

LightStream offers personal loans for virtually any purpose, including new or used vehicles, home improvements, timeshare purchases, boat or aircraft purchases, or to pay off existing debt.

Most of LightStream’s loan programs are designed for people with good to excellent credit, but LightStream also offers secured loans for vehicles. These secured loans may have looser qualifications and slightly higher interest rates, with the same easy loan process.

APR

3.99%
To
16.99%

Credit Req.

Not specified

Minimum Credit Score

Terms

24 to 144

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Origination Fee

No origination fee

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LightStream is the online lending division of SunTrust Bank.... Read More


*Your APR may differ based on loan purpose, amount, term, and your credit profile. Rate is quoted with AutoPay discount, which is only available when you select AutoPay prior to loan funding. Rates without AutoPay may be higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $10,000 loan at 3.99% APR with a term of 3 years would result in 36 monthly payments of $295.20.

The fine print

LightStream does not list a minimum credit score, but it requires borrowers to fulfill multiple requirements. Those most likely to be approved are borrowers with a credit history of at least five years and a variety of revolving and installment loans on record, few missed payments, cash assets or a proven ability to save, and stable, sufficient income to pay the loan and their other debts.

LightStream offers loans from $5,000 to $100,000 for 24 to 144 months, but only loans of $25,000 and up are likely to get terms of 144 months. Interest rates vary from 3.99% to 16.99% when the borrower opts for automatic payments. Invoiced loans may be 0.50 percentage points higher.

Pros

  • If you qualify for a lower APR with another lender, LightStream will match that APR and reduce it by another 0.10 percentage points, resulting in even greater savings (terms may apply)
  • Paperless process makes it easy to apply for a loan
  • If you apply before 2:30 p.m. EST on any business day of the week, your loan may be approved the same day.
  • Loans are for fixed rates, which means your interest and payments won’t increase
  • No origination fee
  • A satisfaction guarantee means that if you receive the loan and are not happy with the process, LightStream will pay you $100

Cons

  • LightStream does not preapprove borrowers, meaning a hard pull is necessary
  • Secured loans are only available with specific products
  • Loans are not available for more than $100,000 or less than $5,000

If you are looking for a fast and easy loan process and are confident about your credit rating, LightStream could help you get the vehicle you want with a secured loan.

Wells Fargo

As one of the largest banks in the U.S., Wells Fargo provides a variety of loan products at low interest rates. With more than 5,000 branches and more than 13,000 ATMs in nearly every state, as well as online and phone banking options, Wells Fargo is easily accessible to consumers across the country.

Banking with Wells Fargo offers many benefits, including potentially lower interest rates on personal loans, to its customers. For customers who have a certificate of deposit (CD) or savings account with Wells Fargo, qualification could be quicker.

Wells Fargo Bank
APR

5.24%
To
18.74%

Credit Req.

Varies

Minimum Credit Score

Terms

12 to 60

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Origination Fee

No origination fees

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The fine print

Wells Fargo offers two savings secured loan products: a savings or CD secured personal loan and a savings or CD secured line of credit. CD/savings secured loans are available for terms up to 120 months, in amounts from $3,000 to $250,000. Wells Fargo does not disclose interest rates on its website, but says that secured loans often have lower interest rates than unsecured personal loans. Additionally, Wells Fargo customers can save 0.50% on their secured loan rate. A secured line of credit gives you access to a credit line starting at $5,000 (up to $250,000). There is a $25 annual fee for the line of credit.

Pros

  • You can get approved within hours and have your money by the next business day in many cases
  • You may avoid early withdrawal penalties on your CD with a CD secured loan
  • Money continues earning interest in your savings account.
  • You can enjoy the convenience of online banking and a large network of branches and ATMs

Cons

  • $75 loan origination fee
  • $25 annual fee for a secured line of credit
  • You must have a qualified Wells Fargo savings product to be approved

With a long-standing reputation and locations across the U.S., Wells Fargo provides convenient loan products for its customers. If you already have a Wells Fargo CD or savings account, a CD/savings secured loan is a good way to put your money to work for you.

OneMain Financial

OneMain Financial has been through a number of name changes since it was founded as Commercial Credit in 1912. Today, the financial institution serves more than 10 million customers with branches in 44 states.

OneMain Financial loans, even the secured ones, may have higher interest rates than you may find elsewhere. Its secured loan products, which require collateral such as a vehicle, may offer lower interest rates than unsecured loans.

APR

18.00%
To
35.99%

Credit Req.

Varies

Minimum Credit Score

Terms

24 to 60

months

Origination Fee

Not specified

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If you have a credit score below 600, OneMain Financial is one of the few lenders that you can use to get a personal loan.... Read More


Not all applicants will qualify for larger loan amounts or most favorable loan terms. Loan approval and actual loan terms depend on your ability to meet our credit standards (including a responsible credit history, sufficient income after monthly expenses, and availability of collateral). Larger loan amounts require a first lien on a motor vehicle no more than ten years old, that meets our value requirements, titled in your name with valid insurance. Maximum annual percentage rate (APR) is 35.99%, subject to state restrictions. APRs are generally higher on loans not secured by a vehicle. The lowest APR shown represents the 10% of loans with the most favorable APR. Active duty military, their spouse or dependents covered under the Military Lending Act may not pledge any vehicle as collateral for a loan. OneMain loan proceeds cannot be used for postsecondary educational expenses as defined by the CFPB’s Regulation Z, such as college, university or vocational expenses; for any business or commercial purpose; to purchase securities; or for gambling or illegal purposes. Borrowers in these states are subject to these minimum loan sizes: Alabama: $2,100. California: $3,000. Georgia: Unless you are a present customer, $3,100 minimum loan amount. Ohio: $2,000. Virginia: $2,600.

Borrowers (other than present customers) in these states are subject to these maximum unsecured loan sizes: Florida: $8,000. Iowa: $8,500. Maine: $7,000. Mississippi: $7,500. North Carolina: $7,500. New York: $20,000. Texas: $8,000. West Virginia: $7,500. An unsecured loan is a loan which does not require you to provide collateral (such as a motor vehicle) to the lender.

The fine print

OneMain Financial makes its lending decisions based on your credit history, income, expenses and the value of the collateral. APRs may range from 18.00% to 35.99%. Secured personal and auto loans are available between $1,500 and $20,000, with terms from 24 to 60 months.

Pros

  • Flexible payment options, including the ability to change your due date
  • Same-day or next-day decisions and funding

Cons

  • High interest rates
  • Must visit a branch to get your loan, even if you apply online
  • Soft Pull required to apply for a loan

Because of the high interest rates, OneMain Financial would not be a top choice for a personal loan for anyone with a good credit score. But if you are in a financial bind and need money for a vehicle or other necessary expense, OneMain Financial’s secured loans can help you get back on track financially.

First Tech Federal Credit Union

First Tech Federal Credit Union was founded in 1952. Founded by employees of Hewlett-Packard and Tektronix, it caters to anyone in the technology industry, including employees of Amazon, Microsoft and Hewlett-Packard.

But you don’t have to work for a tech giant to qualify. You can also join if you work for the state of Oregon or live or work in Lane County. Additionally, membership in the Computer History Museum or the Financial Fitness Association also qualifies you for membership in the credit union.

First Tech Federal Credit Union offers a variety of secured loans that can help you consolidate debt, pay for a major purchase or renovate your home.

The fine print

First Tech Federal Credit Union offers personal loans secured by stocks, CDs or your savings account. You can also use your stocks to back a revolving line of credit with a minimum limit of $25,000.

Interest rates start at 3.00% for a savings secured loan or a certificate secured loan. Borrow as little as $500, or up to $500,000 with a savings or certificate secured loan. Terms are for up to 96 months — or when the certificate matures.

Stock secured loans start at 4.75% APR, and stock secured lines of credit have starting APRs as low as 8.50%. Borrow as little as $25,000 and as much as $1,000,000 with a stock secured loan or line of credit, with terms up to 144 months for a loan. There are no application, origination, refinance or prepayment penalty fees.

Pros

  • Loan payments begin within the first three months for stock, certificate and savings secured loans
  • Receive a decision within 24 hours
  • Great way to build your credit
  • Online and mobile banking features let you make payments and access your money easily when you need it

Cons

  • Only available to First Tech Federal Credit Union members
  • You must have assets in the form of cash, CDs or stocks to get a secured loan

If you have cash reserves, stocks or certificates but no credit history, a secured loan from First Tech Credit Union can help you build your credit score.

A good credit score can help you take advantage of the best rewards credit cards, manage cash flow and help your money work harder for you. First Tech Federal Credit Union has a variety of secured loan products at low interest rates.

Digital Federal Credit Union

Founded in 1979, Digital Federal Credit Union is a tech-forward organization with a wide variety of checkings and savings accounts, as well as CDs, retirement accounts and more.

You can become a member if you:

  • Live in certain parts of Georgia or Massachusetts
  • Work for, are retired from or are related to someone who works for or is retired from one of the credit union’s partner employers
  • Are a relative of a member
  • Get a membership with one of its partner nonprofits

Digital Federal Credit Union offers a variety of loan products, including auto loans, home equity loans and a savings secured loan that lets you borrow against your savings account or CD.

The fine print

The credit union’s secured personal loans let you borrow as little as $200 up to as much as the amount in your savings account or certificate account for up to 120 months, with rates as low as 3.50% for a savings secured loan. Certificate-insured loans have terms up to 120 months, but they are not allowed to exceed the term of the certificate account. Interest rates start at the certificate rate plus 3.50%.

Pros

  • Apply conveniently online or by phone
  • Allows you to build or rebuild your credit
  • Low interest rates
  • Lets your savings work for you

Cons

  • Must be a member of the credit union
  • Rates for certificate secured loans change as certificate rates change

Good credit can help you get better rates on auto insurance and unsecured loans, be approved for a better luxury apartment to rent and take advantage of cash rewards credit cards.

If you have a savings or certificate account but no credit history, a savings secured loan from Digital Federal Credit Union with low interest rates can help you build your credit.

To determine our selection of lenders, we first reviewed those in MagnifyMoney’s personal loan marketplace that offered secured loans. We took APR, terms, origination fee and perks, such as the ability to change your due date, into account. Using those same factors, we then researched other lenders offering secured loans.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Dawn Allcot
Dawn Allcot |

Dawn Allcot is a writer at MagnifyMoney. You can email Dawn here

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