Pledge Loan Essentials with Navy Federal Credit Union: Get Ahead Now!

This article is a summary of the YouTube video ‘Top 3 Things to Know Before Getting a Pledge Loan With Navy Federal Credit Union’ by Just Money

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Written by: Recapz Bot

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Navy Federal offers secure pledge loans to improve credit and earn points, with restrictions and strategies to maintain credit history and score, while the video creator covers diverse financial topics and has relevant professional licenses in Southern California.

Key Insights

  • A pledge loan with Navy Federal Credit Union is a loan fully secured by your savings.
  • Reasons people get pledge loans: to build or rebuild credit, to earn internal points with Navy Federal, and to improve their credit mix.
  • You're only allowed four pledge loans per savings account.
  • If you have multiple pledge loans, make sure to have at least one with a longer loan term and a larger amount to maintain credit history.
  • Consider your game plan before getting a pledge loan and determine whether to pay off immediately or wait for the amount to reflect on your credit report before paying.
  • Too many pledge loans open at the same time can lower your credit score, so be cautious.
  • It's recommended to get the highest amount and longest loan term available for the best results.
  • Consider getting a Navy Federal secured or unsecured credit card to help with internal points and credit mix.
  • The video creator covers various financial-related topics, including personal and business credit, real estate, and mortgage loans.

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Transcript

If you end up getting a pledge loan with Navy Federal Credit Union, then there are a few things you should know before getting one. In a recent video on the Navy Federal Pledge Loan, I talked about the hacks they offer. But in this video, I’ll be going over the top three things you should know. If you’re new to my channel, my name is Ish Sanford and welcome to Just Money, where we discuss financial-related topics such as personal and business credit, real estate, and more. If you’re interested in these topics, consider subscribing. Now let’s get to today’s video.

In a previous video, I explained what the Navy Federal Pledge Loan is and how to go about getting one. If you’re not familiar with it, it is a loan fully secured by your savings. So essentially, you borrow money from your savings and turn it into an installment loan. The loan amount is determined by how much you put up as collateral. This is not a hard pull on your credit, but rather a soft pull, regardless of how many times you do it. People get this loan for several reasons: to build or rebuild credit, to earn internal points with Navy Federal, and to improve their credit mix. Having a variety of credit types contributes to about 10% of your credit score and looks good to other lenders when applying for different things.

Now let’s go over the top three things you need to know before getting a pledge loan.

First, you are only allowed to have four pledge loans per savings account. If you plan to have multiple pledge loan accounts, make sure you have at least one that you pay off over a longer term than the others. This is because once you finish paying off a loan, the account will close, and you will lose the credit history associated with it. Losing this history can cause your credit score to drop, so consider this before applying.

Second, you need to have a game plan before getting a pledge loan. You can choose to pay off 80 to 90% of the loan immediately or wait 30 to 45 days for the full amount to reflect on your credit report before paying it off. It is generally better to wait for the full amount to be reflected on your credit report, but keep in mind that your credit score may temporarily drop. If you need to apply for something important within a few months of receiving the loan, it is recommended to pay off a significant portion of the loan as soon as the funds are available. Consider your goals and timeline before making a decision.

Lastly, it is not advisable to have multiple pledge loans open at the same time. Having too many open loans can negatively affect your credit score. While it’s possible to have two concurrent loans, it’s better to focus on longer-term loans rather than short-term ones that open and close frequently. Opening a new loan makes your credit age appear newer, which may decrease your credit score. Additionally, when you close a loan, it will no longer be reported, triggering another decrease in your credit score.

To summarize, the top three things to know before getting a pledge loan are: the limit of four pledge loans per savings account, the importance of having a game plan, and the potential negative impact of having multiple pledge loans open at once. Consider getting the highest amount possible and selecting the longest repayment term available for the best results. You might also want to consider getting a secured or unsecured credit card from Navy Federal to improve your credit mix and earn internal points. Thanks for watching!

This article is a summary of the YouTube video ‘Top 3 Things to Know Before Getting a Pledge Loan With Navy Federal Credit Union’ by Just Money