CD loans are an option if you don’t qualify for any other type of borrowing. If you have an emergency fund, retirement accounts, taxable investment accounts, or even credit cards, you don’t need to explore a CD loan.
Along with that, if you don’t currently have a CD loan, you won’t qualify for this option, so you’ll want to look elsewhere to borrow money.
How to apply for a CD loan
Applying for a CD loan is similar to applying for any kind of loan. Here are the basic steps:
- Check your credit. When you apply, your lender will likely perform a hard credit check to ensure that you are financially responsible and able to meet the payment terms of your new CD loan.
- Compare CD loan terms. Your rate and terms may be determined based on your financial picture, but generally, you can’t borrow more than the amount you have in your CD. Depending on your bank, you may be able to choose from a selection of loan terms.
- Gather the required documents. You’ll need to provide your personal information, financial information and loan details.
- Complete your application. Most banks allow you to apply for a CD loan over the phone, online or at a branch. Once you’re approved, you could receive funds within a few days.
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