Personal Finance Tips : Loans & Checking Accounts


This is financial adviser Patrick Munro talking
about loans without a checking account. Having a loan in America is sometimes an important
situation because many of the things that we do in life require credit. If you don’t
have a checking account, it’s difficult for you to get a better rate on your loan. A checking
account is a feel good vehicle for the financial institution because what they can do is set
up your payment on an automatic drop basis, on your checking account, to make sure that
they all get paid. If you don’t have the ability to have a checking account, many times you
have to put up other security to the financial institution that’s worth value so that they
in turn can give you your loan. And many times this could be a savings vehicle such as a
certificate of deposit, money that you’ve saved. For instance, if you save a thousand
dollars in a CD, you could give that CD to the bank as security in lieu of a checking
account, and they would give you in turn a thousand dollar loan. Once that thousand dollar
loan is paid off on a pre-agreed payment schedule, they would return your security, which is
your thousand dollar CD. It’s a lot of work. It’s better to develop a relationship with
a financial institution and get a checking account. This is Patrick Munro discussing
checking accounts and how to get loans.

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