Secured loan on credit file as unsecured

Hi, I have recently took out a secured loan (10.5k) via my credit union, it is secured on savings that I have to the same value. It is showing on my credit file as an unsecured loan. Will this have any negative impact on my file or does it not matter either way ? Thank you in advance! 

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  • marcia_
    marcia_ Posts: 1,761 Forumite
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    MrsY100 said:
    Hi, I have recently took out a secured loan (10.5k) via my credit union, it is secured on savings that I have to the same value. It is showing on my credit file as an unsecured loan. Will this have any negative impact on my file or does it not matter either way ? Thank you in advance! 
     If you have 10.5k in savings why would you take a loan for that amount? 

     It wont effect your credit file 
  • sammyjammy
    sammyjammy Posts: 7,366 Forumite
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    That is an unsecured loan even if they required you to have the savings. a secured loan is when it is secured on your property or something similar, No need to worry about your credit file, it sounds correct.
    "You've been reading SOS when it's just your clock reading 5:05 "
  • cymruchris
    cymruchris Posts: 5,158 Forumite
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    marcia_ said:
    MrsY100 said:
    Hi, I have recently took out a secured loan (10.5k) via my credit union, it is secured on savings that I have to the same value. It is showing on my credit file as an unsecured loan. Will this have any negative impact on my file or does it not matter either way ? Thank you in advance! 
     If you have 10.5k in savings why would you take a loan for that amount? 

     It wont effect your credit file 
    Likely to get some kind of positive credit history on the OP's files. I imagine there's either a challenging history, or a very thin credit file, which means the OP is having difficulty accessing regular credit. Therefore by taking a loan for the value of the savings, there's no risk to the credit union - but the OP ends up with some positive entries on their reports to help gain access to other products as time goes on.
    An ex-bankrupt on a journey of recovery. Feel free to send me a DM reference credit building credit cards from the usual suspects :) Happy to help others going through what I've been through!
  • marcia_
    marcia_ Posts: 1,761 Forumite
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     Thank you that makes sense 

  • That is an unsecured loan even if they required you to have the savings. a secured loan is when it is secured on your property or something similar, No need to worry about your credit file, it sounds correct.
    It’s not unsecured - it’s secured against my savings. I can’t withdraw my savings (to the balance of the loan that I owe)
  • marcia_ said:
    MrsY100 said:
    Hi, I have recently took out a secured loan (10.5k) via my credit union, it is secured on savings that I have to the same value. It is showing on my credit file as an unsecured loan. Will this have any negative impact on my file or does it not matter either way ? Thank you in advance! 
     If you have 10.5k in savings why would you take a loan for that amount? 

     It wont effect your credit file 
    A couple of reasons - if I die then my husband will be able to have the saving and the loan will be written off. Also the credit union matches savings up to 5k so he would also get that. My credit score is very good but credit union offered a good rate for a secured loan. It wasn’t anything to do with my credit file. I just happened to notice it and wondered if it would have a negative impact. 
  • cymruchris
    cymruchris Posts: 5,158 Forumite
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    MrsY100 said:
    marcia_ said:
    MrsY100 said:
    Hi, I have recently took out a secured loan (10.5k) via my credit union, it is secured on savings that I have to the same value. It is showing on my credit file as an unsecured loan. Will this have any negative impact on my file or does it not matter either way ? Thank you in advance! 
     If you have 10.5k in savings why would you take a loan for that amount? 

     It wont effect your credit file 
    A couple of reasons - if I die then my husband will be able to have the saving and the loan will be written off. Also the credit union matches savings up to 5k so he would also get that. My credit score is very good but credit union offered a good rate for a secured loan. It wasn’t anything to do with my credit file. I just happened to notice it and wondered if it would have a negative impact. 
    That's an interesting arrangement. Are you paying any interest on the loan? Or does it get cancelled out by interest on the savings? 

    The 5k that they put forwards is just in the event of your passing away?

    And if you do pass away, you say that although the loan and savings are related while alive, on death, they cancel the loan but still issue the savings to your husband? 
    An ex-bankrupt on a journey of recovery. Feel free to send me a DM reference credit building credit cards from the usual suspects :) Happy to help others going through what I've been through!
  • Yes I’m paying a small interest. The savings earn dividends. 

    They match any savings when u die up to the value of 5k wether it’s secured to a loan or not. 

    Loan would be written off in the event of my death and savings would be protected 
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