fbpx Skip nav to main content.

CD Secured Loans

Leverage Your Existing Savings in a CD

Apply for a Loan

Certificate of Deposit Secured Loans

A CD Secured Loan, also known as a Certificate of Deposit Secured Loan, is a type of secured loan that uses a certificate of deposit (CD) as collateral. This loan option is ideal for individuals who need to borrow money but want to leverage their existing savings in a CD without having to withdraw the funds and lose the interest they are earning.

Key Features of a CD Secured Loan

Collateral-Based: The loan is secured by your CD, meaning PDCU can claim the CD if you fail to repay the loan.
 
Lower Interest Rates: Because the loan is secured with collateral, the interest rates or lower compared to unsecured loans.
 
Continued Earnings: Your CD continues to earn interest even while it is being used as collateral for the loan.
 
Credit Building: Successfully repaying a CD secured loan can help build or improve your credit score.
 
Flexible Uses: The funds from a CD secured loan can be used for a variety of purposes, including debt consolidation, home improvements, or unexpected expenses.

How a CD Secured Loan Works

Application: Apply for the loan if you have a CD with PDCU.
 
Loan Amount: You can borrow up to the amount of the CD’s value.
 
Interest Rate: The interest rate on the loan will generally be lower than that of an unsecured loan, due to the reduced risk.
 
Repayment Terms: The terms of repayment are agreed upon during the loan application process and can vary in length.
 
Continued Access to Funds: Even though the CD is used as collateral, you still earn interest on it and it remains part of your savings.

Benefits of a CD Secured Loan

Cost-Effective Borrowing: With lower interest rates, you save money on interest payments compared to unsecured loans.
 
Preserve Savings: You do not have to break your CD, allowing it to continue earning interest and potentially avoiding early withdrawal penalties.
 
Credit Improvement: Regular, on-time payments can positively impact your credit score.
 
Easy Qualification: Since the loan is secured by your CD, qualification requirements may be less stringent than for unsecured loans.

Secured Loan Rates

Secured Loan

Max Term


(Months)

APR*


as low as
Share Covered 84 5.25%
Credit Builder Loan (Max $2,000) 18 13.00%
CD Secured Loan (No Money Market, IRA, or Club Accounts) 84 APY + 3.50%

Frequently Asked Questions

A CD Secured Loan is a type of loan that uses a Certificate of Deposit (CD) as collateral. This allows borrowers to access funds while keeping their CD intact and continuing to earn interest. Since the CD secures the loan, it often comes with lower interest rates.
When you take out a CD Secured Loan from People Driven Credit Union, your CD is held as collateral. You borrow an amount that’s usually equal to or less than the value of the CD. You continue to earn interest on the CD during the life of the loan. Once the loan is repaid, you regain full access to your CD.
The benefits of a CD Secured Loan include
  • Lower Interest Rates: Because the loan is secured by your CD, the interest rates are typically lower than those of unsecured loans.
  • Credit Building: A CD Secured Loan can help you build or improve your credit score through consistent, on-time payments.
  • Preservation of Savings: You can access loan funds without breaking your CD and continue to earn interest on it.
A CD Secured Loan can be used for a variety of purposes, such as covering unexpected expenses, making large purchases, or consolidating debt. Since it’s a personal loan, you have the flexibility to use the funds as needed.
The loan amount is typically based on the value of your CD. You can usually borrow up to 100% of the CD’s value.
Yes, your CD continues to earn interest while it’s used as collateral for the loan. This means you benefit from both the loan funds and the interest accumulation on your CD.
If you are unable to repay the loan, the lender may seize the funds in your CD to cover the outstanding loan balance. Defaulting on the loan can also negatively impact your credit score.
People Driven Credit Union has teamed up with GreenPath Financial Wellness to assist our members in improving their finances and credit. To get started, call GreenPath at 877-337-3399, mention that you're a PDCU member, and schedule an appointment with one of their representatives!
Interest rates on CD Secured Loans are generally lower than those of unsecured loans because the loan is backed by collateral. However, the rate may vary depending on the lender, the secured CD's Annual Percentage Yield (APY), and the loan term.
A CD Secured Loan can help you build or improve your credit score if you make on-time payments. People Driven Credit Union will typically report your payment history to the credit bureaus, which can positively impact your credit.
Yes, People Driven Credit Union allows early repayment of CD Secured Loans without penalties. Paying off the loan early can help you save on interest costs and regain full access to your CD.
Repayment terms usually range from 12 to 84 months, but other terms may be available. Your loan term will affect your monthly payments and the total interest you pay over time.
Once you’ve fully repaid the loan, the hold on your CD is lifted, and you regain full control of your Certificate of Deposit. You can withdraw the funds or let the CD continue earning interest until maturity.
Since your CD secures the loan, lenders are often more flexible in approving borrowers with less-than-perfect credit. However, the terms and rates may vary based on your creditworthiness.
A CD Secured Loan requires collateral (your CD), typically resulting in lower interest rates and easier approval. An unsecured loan doesn’t require collateral, so it usually comes with higher interest rates and depends more on your credit score.

Disclosures

*APR = Annual Percentage Rate: The actual APR and loan term are subject to approval and may be determined upon the borrower’s creditworthiness, the amount borrowed, and the type, value, age, and condition of the collateral offered to secure the loan (when applicable). Rates are effective as of today and are subject to change.

Payment Example: Monthly payments of $20.00 for each $1,000 borrowed at 6.55% APR for 60 months.

E H L. People Driven Credit Union is an Equal Housing Opportunity Lender NMLS #776727
All other trademarks are the property of their respective owners.

Membership Requirement:

All accounts and loans require membership at People Driven Credit Union. Membership is available to individuals who live, work, worship, or attend school in the State of Michigan, as well as relatives of current members. To complete an application for any account or loan, you will need the following information:
  • A valid Driver's License, State ID, or Passport with your current address
  • Your Social Security Number
A Membership Share Savings Account is required to establish membership at People Driven Credit Union. Your $5 deposit into this account secures your share in the credit union, giving you access to our full range of services and benefits. The Annual Percentage Yield (APY) for this account is 0.01%, and the minimum deposit is $5.00.

Membership in People Driven Credit Union is open to:

Michigan Residents. Persons who reside, work, attend school or worship anywhere in the state of Michigan.

Employees or pensioners of agencies of the federal government of the United States of America who live or work in the State of Michigan, or who report to a federal agency headquarters located in the state of Michigan.

Employees or pensioners or agencies of any state, county, or local government, or any political subdivision thereof located within Wayne, Oakland or Macomb Counties, Michigan.

Employees or retired employees of the following: Ford Motor Company or Visteon Corporation, who work in Rawsonville or Wixom, MI; members of the Red Carpet Club, a retirees’ association in Washtenaw, Oakland, Macomb, Monroe or Wayne Counties, MI; Tower Automotive who work in Plymouth, MI; and Ford Utica Trim Plant.

Employees or retired employees of the following: Ford Motor Company, Visteon Corporation, Automotive Components Holdings, L.L.C. or Faurecia, who worked in Ypsilanti, Rawsonville, Saline, Milan, Highland Park, Mount Clements, Wixom, or in Shelby or Chesterfield Townships, MI or at the Ford Proving Grounds in Macomb County, Michigan; Ford New Holland; Ford Romeo Engine Plant who worked in Romeo, MI Oakman Industrial Engine Plant in Detroit, MI Johnson Controls Inc.; Hoover Automotive Systems Group who work in Utica, MI; AutoAlliance International, Inc. Mazda (North America), Inc; Mazda Research & Development of North America, Inc.; Mazda System Services and Mount Clemens Coating, Inc. who worked in Mount Clemens; and Tower Automotive who worked in Plymouth, MI.

Employees of this credit union.

Results of the merger of Sinai Health Services Credit Union, Detroit, MI, effective July 1, 1992

Results of the merger of M.E.S. Credit Union, Detroit, Michigan, effective January 1, 2004

Results of the merger of Peoples Trust Credit Union and Community Driven Credit Union, effective July 1, 2014

Results of the merger of Community Alliance Credit Union effective January 1, 2023

Members and immediate families of the foregoing.

Any legal entity that is comprised for the most part of the same general group as the membership of the credit union as outlined above.

A spouse of a deceased member if accepted into membership prior to remarriage.

Family Membership. Anyone related to a PDCU member by blood or marriage, regardless of where they live or work in the U.S.

Retirees. Anyone over age 55 (or younger, if on disability retirement) who receives a retirement annuity, pension, social security, or other retirement payment from private or government sources and lives in, or belongs to, a retirement organization located in Wayne, Oakland, Macomb, St. Clair, Lapeer, Genesee, Livingston or Washtenaw counties.