Background
Ashley Taylor is a Financial Service and Loan Approving Officer at the State Employee’s Credit Union (SECU) in Winston-Salem, North Carolina. She’s worked for SECU the past four years and has received several promotions along the way. Ashley started as a Financial Services Representative and has worked her way up to a Financial Services Officer III with Tier 2 approving loans, meaning she can approve up to $30,000 for a car loan, $200,000 for a mortgage loan, and $15,000 for an unsecured loan or credit card. Ashley was extremely helpful and actually gave me a personal loan evaluation based on some basic information about my lifestyle and income.
Main Points
A Home Equity Line of Credit (HELOC)
o Highly recommended as collateral
o Can borrow up to 90% of house appraisal, less the amount owed on your present mortgage. The maximum loan amount is $100,000.
o Can deduct interest on taxes
o If home is currently financed through SECU, 2.75% interest or 3.50% interest if financed with a different lender
o Pay $12 on every $1,000 borrowed
o Continue to borrow for 15years, then reapply and get another appraisal
o Only downside is that HELOC has a variable rate, but will most likely have lower APR rate than other banks
Closed-End Personal Loan
o Max loan of $35,000 if individual or $70,000 if joint
o 10.75% interest
o Approval made based on credit history (not credit score), and interest rates are the same for all borrowers
Open-End Line of Credit
o Stays open until closed out
o Only pay interest on existing balance
Pros to the SECU
No closing fees, no processing fees, not based on credit score (only on credit history) – only fee is for appraisal
Lower interest rates than banks
Cons to the SECU
Low risk loans- because the credit union is member owned, they do not want to put the member’s money at stake
Lower sums of money provided- $100,000 for HELOC, $35,000 for personal loan
The credit union is a great start for first time entrepreneurs with a small business plan. Businesses who do not need a lot of startup money will reap the benefits of low interest and can also retain equity as opposed to working with an investor. In addition, because SECU is not a score-based lender, an individual with limited credit history has the opportunity to get a loan with the same low interest rate. As a member of the credit union, I can attest to saying they take care of their customers and offer a great deal of opportunities.
