DES MOINES, IA / ACCESS Newswire / June 29, 2026 / / ACCESS Newswire / June 29, 2026 / If you need extra funds but are having trouble qualifying for financing, a share-secured loan may be an option. With a share-secured loan, you use the funds in your interest-bearing bank accounts as collateral when you borrow money. Keep reading to learn more about share-secured loans and how they work.

Share-secured loan vs. secured loan: What's the difference?

A share-secured loan is a type of secured loan. Let's explore some of the key differences.

Secured loan

What is a secured loan? A secured loan is a lump sum of money you borrow and repay with interest, backed by collateral. Collateral is a valuable asset like real estate or a car. The lender can seize the asset if you cannot repay the loan according to the agreed-upon terms.

Secured loans typically offer low interest rates and favorable repayment terms, making them an attractive option for individuals who need access to extra cash

Share-secured loan

A share-secured loan is a type of secured loan that uses the funds in your bank or credit union account as collateral. Like other secured loans, you repay a share-secured loan with interest over a set amount of time. The funds in your account are used to guarantee repayment of the loan in case you default.

Benefits of a share-secured loan

Share-secured loans are not a common option, but they can have several benefits.

Access to quick cash

Share-secured loans may be a good option if you need access to extra money and don't want to dip into your savings.

Easier qualification and lower interest rates

Like other secured loans, share-secured loans are usually easier to qualify for if you have less-than-perfect credit. They typically offer lower interest rates compared to unsecured loans.

Potential credit score improvement

Taking out a share-secured loan and making loan payments on time can help you build your credit history and boost your credit score. Enrolling in autopay is a great way to ensure you never miss a payment.

Disadvantages of share-secured loans

Share-secured loans have disadvantages, too. It's always important to carefully consider the drawbacks before applying for a shared-secure loan.

Uncommon option

Share-secured loans are typically offered by credit unions and small banks. You may not be able to get one through a larger bank or other lender.

Frozen funds

You can't withdraw any of the collateralized funds until the loan has been repaid according to the agreed-upon terms.

Risk of losing money

If you default on a share-secured loan, the financial institution that granted the loan can seize the money in the account used to secure it.

Who should get a share-secured loan

You may benefit from a share-secured loan:

• If you don't qualify for other types of financing

You may want to consider alternative financing options:

• If you're seeking a loan amount higher than the amount you have in savings

If you decide to move forward with a share-secured loan, the best way to find a reputable lender is to research online and read reviews to find what works best for you. You can compare rates, terms and other essential features before making a decision. Additionally, speaking with a financial expert who can help you evaluate your options can be helpful.

Bottom line

If you're looking into a share-secured loan, carefully consider all your options and research the pros and cons before making a final choice. As with any significant financial decision, it's also a good idea to speak with an expert who can offer professional guidance before you move forward.

Contact Information:

Name: Nagarameshwar J.
Email: nagarameshwar.j@iquanti.com
Job Title: Director

SOURCE: OneMain Financial