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Secured line of credit with lowest spread or rate above interest paid on the secured CD.

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conceptionaly   I have a "business", I have an EIN # and state licenes. But I am an unincorporated sole proprietor and am fine doing a  personal line of credit as well. I do schedule E and do not have any taxes withheld

 I have a friend /relative who is willing to place 15,000 to 25,000 dollars in a CD to be untouchable and used as collateral for a SECURED line of credit.

      I recall some years ago , that I saw a credit union that was only 150 basis points or 200 basis points  ( 1.5% to  2% ) above the puny rate that the CD earned.

      For example if the CD paid 1% interest, then the rate on the line of credit was  only  2 and a half or 3%.

    Obviously, this was a very fair deal.  It was some years ago (I filed BK 7 over 4 years ago and maybe my numbers  ( hence memory )are off.

             I have a very strong preference for a line of credit that I can pay down and then draw on again.

    If it had to be a lump sum loan, I could live with that , but I seem to be seeing 7% spreads.

     i.e. CD pays 1% and secured loan required to be disbursed all at once is 8%

     

 If anyone knows a good source for this, I would be very grateful.

   I thought that at $25K maybe a credit union of "community Bank" might be interested and I would even pay an origination fee.

Thank you to all for your time and gracious help

 

I remember like 6 years ago Chase Slate considered direct deposit into the cardholder checking account as a "purchase" with zero interest for like 21 months. I see this is no longer an option. Any cards that will still  allow this?

 

 

Edited by new to Fico and Fako
put title in bold

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just curious what you think the advantage of a secured loan will be for you or the biz

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conceptionaly   I have a "business", I have an EIN # and state licenes. But I am an unincorporated sole proprietor and am fine doing a  personal line of credit as well. I do schedule E and do not have any taxes withheld
 I have a friend /relative who is willing to place 15,000 to 25,000 dollars in a CD to be untouchable and used as collateral for a SECURED line of credit.
      I recall some years ago , that I saw a credit union that was only 150 basis points or 200 basis points  ( 1.5% to  2% ) above the puny rate that the CD earned.
      For example if the CD paid 1% interest, then the rate on the line of credit was  only  2 and a half or 3%.
    Obviously, this was a very fair deal.  It was some years ago (I filed BK 7 over 4 years ago and maybe my numbers  ( hence memory )are off.
             I have a very strong preference for a line of credit that I can pay down and then draw on again.
    If it had to be a lump sum loan, I could live with that , but I seem to be seeing 7% spreads.
     i.e. CD pays 1% and secured loan required to be disbursed all at once is 8%
     
 If anyone knows a good source for this, I would be very grateful.
   I thought that at $25K maybe a credit union of "community Bank" might be interested and I would even pay an origination fee.
Thank you to all for your time and gracious help
 
I remember like 6 years ago Chase Slate considered direct deposit into the cardholder checking account as a "purchase" with zero interest for like 21 months. I see this is no longer an option. Any cards that will still  allow this?
 
 
You have a very good friend. For deals like this I would personally charge you around 10% to 15%. I would really have to trust you though. Remember, his interest or return is more related to your ability to repay the loan. He is basically lending you the money directly because he is taking all of the risk. Also, if I were him I would not structure this as an LOC. I would just lend you the money. He is not a bank and like banks LOC's only make money when the funds are used. Also, why not just pay your friend the origination fee? He deserves it. Good luck.

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I think nfcu does this for a 2% spread, if not eligible check with local cu

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