How Much of My CD’s Value can I Borrow?

It seems as though the longer we live the more we realize just how important it is to save our money. When we’re younger we are more inclined to live without thought for tomorrow, and so we spend what we get. It only takes one emergency or threat of an emergency to make us sit up and take notice of the fact that we need to be prepared for emergencies as well as build stepping stones to a brighter future. Much of this is accomplished by saving, and one popular way of saving money – while at the same time making it – is to invest in certificates of deposit. CDs, as they’re more commonly known, can’t be accessed (without being penalized for it) for their lifespan until they reach their maturity date. Because of this reason, many people like to take out loans against their CDs.

When you borrow against your CD, many of the terms of the loan will be influenced by the nature of your CD. In the first place, you should probably go to the bank where you currently hold the CD and take out the loan there. Most, if not all banks are disinclined to offer loans against CDs held at other banks. The size of the CD will influence the size of the loan of course, seeing as you’re using the CD as collateral for the loan. You will also see the loan you take out against your CD be influenced by the lifespan of your CD, since certificates of deposit come with varying maturity dates. When you borrow against your CD you can borrow up to 100% of its value.

To learn more about CDs, borrowing against your CD, loans, and other important issues regarding your finances – be sure to speak with a financial advisor. He or she can discuss with you all the pros and cons of investing in CDs, as well as the pros and cons of borrowing against your certificate of deposit.