Personal loan secured by a savings account or a certificate of deposit (CD). These loans normally attract a lower interest rate - about two to three percent higher than the interest paid on savings or CD. Depending upon the bank, the loaned amount varies from 50 percent to 100 percent of the savings account or CD amount, with the typical being 90 percent. Passbook loans are usually issued without a credit check since the lender is under little or no risk of loss due to default. In most cases, however, banks don't report these loans to the credit bureaus and thus don't build up the borrower's credit rating.
Related information about passbook loan:
- Passbook Loan Definition | Investopedia
A personal loan extended to a savings-account holder by the custodial bank. Passbook loans use the balance of the savings account as collateral for the loan.
- Passbook loans: Paying to borrow your own money
"A passbook loan won't build your credit. Ninety-five percent won't be reported to the credit bureaus. You can request it, but it probably won't. The banks really ...
- What is passbook loan? definition and meaning
Definition of passbook loan: Personal loan secured by a savings account or a certificate of deposit (CD). These loans normally attract a lower interest rate - about ...
- What is a Passbook Loan? | eHow.com
What is a Passbook Loan?. A "passbook loan" is a bygone banking term that describes a secured personal loan. In the past, any savings account opened at a ...
- A Passbook Loan Explained
A passbook loan is simply a loan using a deposit account as security for a loan. It can be used to establish credit, re-establish positive credit or provide funds ...
- Passbook Loan: Definition from Answers.com
Savings Account Loan Collateral Loan secured by savings account up to the amount advanced to the borrower.
- Passbook Savings Loans are Secured by Savings, CD Balances ...
May 23, 2012 ... Passbook loan rates vary greatly (see chart, "Compare passbook savings and CD loans"), but can be as low as 2% above what the savings ...
- Passbook-Secured Loans - Financial Web
The passbook loan is a secured personal loan. In order to qualify for it, you must already have funds on deposit at the bank or credit union that you make ...