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The Proper Use of Navy Federal Pledge Loan - YouTube
Channel: Money Growth Project
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what's up money growers jacob back here
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with another video coming you guys today
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to talk about navy federal credit union
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and the pledged loan particularly well
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there's technically two types of pledge
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ones we'll go over that here briefly in
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just a moment that's what we're talking
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about today i want to do what i can to
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try to make the pledge loan um as simple
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to understand as possible i'm going to
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do what i can to simplify this and you
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know we're going to um
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talk about the two different types they
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have briefly i'm actually going to go
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into my account and show you guys what
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it looks like when you have the pledge
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loan
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in your account and then also i'm going
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to show you guys a um just a simple
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chart that i made to show you the whole
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thing about paying it uh early so people
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say well not paying the whole loan early
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but paying a big chunk of it like up
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front you know like in the first month
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so i'm going to show you guys how the
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actual math breaks down because i think
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there's some confusion about how that
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breaks down so i'm going to do what i
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can by the end of this to have it is
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simple enough uh that pretty much
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everyone can understand the concept and
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they can make a decision for themselves
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if they would like to go ahead and get a
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pledge loan um with navy federal credit
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union people like to use them to build
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their rep
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relationship with maybe federal credit
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union then they oftentimes like to get
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them because it can um help with their
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credit score as well so showing those
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on-time payments and all that kind of
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thing
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so go ahead hit the like button for this
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video and subscribe to the channel
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because uh this channel has been growing
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very well and i'm doing my best to put
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out content like this i think it's going
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to be good i have everything all set up
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i think it's going to be good and i just
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want to show you guys this and hopefully
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it
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goes well and i hope you guys appreciate
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it
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so uh let's look at this
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so if you type navy federal pledge loan
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you'll see uh this will usually come up
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right here okay now we're gonna check
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out this link in a minute but i want to
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show you guys when you have a pledge
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zone what it looks like when you're
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signed into your account so this is my
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account right here okay uh that we're
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looking at at the moment so you'll sign
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in right here like i said i don't keep a
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lot of cash in my account you have a
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checking account savings shavings
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savings account
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um flagship card checking line of credit
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and then the pledge though i am going to
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be getting the flagship checking soon uh
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so we have a shares pledge loan right
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here
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okay now i took it out just for 250
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which is the lowest amount you can do
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they let me do it for
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60 months
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6-0 60 months five years repayment which
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i don't think they're actually supposed
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to do that but even when i spoke to the
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the guy who did the loan for me as well
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because the system allowed me to do he's
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like so kind of like whatever kind of
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thing right so for 60 months to repay it
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remember the loan is going to be at a
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2.25 interest rate for the one i did
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here for the um 2.50 cents they do have
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different um
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for like the rates and stuff like that
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for the amounts the terms all that kind
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of stuff you can find a lot on the
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website or if not you can call in and
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ask them so looking here at the loan
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so if you click here it'll show i've
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only made one payment so far in this
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loan
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right it shows the payment four dollars
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42 cents that's what i'm going to be
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paying per month for the next five years
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to pay off this loan of 250 okay that's
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what it looks like you can set up
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automatic payments you can do that if
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you'd like and you know just simplify it
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that way
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now the thing that a lot of people
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encourage you to do and you can
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absolutely do this and i plan to do this
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in the future with a bigger loan with a
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small amount like 250 bucks i'm not
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really worried about doing this but if
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i'm gonna do a loan for like 20 30 40 50
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000 i'm definitely going to be uh paying
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a good chunk of it up front and that's
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what people encourage you to do
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so
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that's a lot of people encourage you to
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do so looking at it here okay this is
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the this is the actual link that um
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where navy fedo talks about the
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loans they have okay so when you're
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looking at this savings pledge loan
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that's what we're talking about not the
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certificate one here so we're talking
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about the savings one because what you
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can do
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is you have to have the money to do this
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because it's secured by your own cash so
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if you have cash you know you cannot get
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a loan for more cash than you have
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available so
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it is fully secured by your savings
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account so just like a secured credit
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card it's your own money same concept
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with the savings pledge loan it is your
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own money so it means the amount you get
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is equal to your loan
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which means that an amount equal to your
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loan is put on hold when you pay down
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the loan the amount is released from the
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hold and more funds become available to
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you someone asked us the other day in
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the comment section uh how soon you get
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the funds released to you i think one
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person said next day someone else said
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same day so i think mine is this first
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time is was the next day but either way
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you're getting it back pretty quickly
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now these are some of the reasons people
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like to borrow
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or you know but really remember you're
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just borrowing your own money that's
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what you're doing okay this is really a
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great tool to have the at the very least
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build a relationship with navy federal
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and for some people to help increase
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their credit score so these are some of
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the reasons people borrow because the
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interest rate is low like for the one i
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have since two and a quarter two point
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two five percent um yes the account can
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earn dividends so it's technically a two
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percent interest rate because you get a
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quarter of a percent of dividends so the
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two and a quarter interest plus the
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quarter
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one quarter percent of dividends is two
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percent so i also remember what the um
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employee told me when i signed up for it
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and then yeah the on-time payments can
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be your credit score you don't need a
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credit check to qualify one employee
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told me you could get a hard inquiry on
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a pledge loan i never heard that before
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so video says right here no credit check
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to qualify so i don't know
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um now looking at this
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we're going to do a simple example of
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just
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the pay the payback and how you do it if
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you're going to pay a big chunk up front
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all right
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now looking at this this is not going to
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be taking account into account interest
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and stuff like that this is just for
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people to understand the concept
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so i'm going to use simple math to do
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the best i can to keep this simple so
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that people can just understand the
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concept we're not talking said interest
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and all this other kind of stuff it's
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not a full amortization table i'm doing
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here right so this is going to show you
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what is what happens when you actually
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pay
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a big chunk up front so let's say the
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loan amount you have is 600 bucks let's
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say you have 12 months to pay it back
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okay
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and then let's so what is that 600
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divided by 12 that's 50 a month all
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right keeping this very simple
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now if you're gonna pay 50 a month
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let's say you got the loan in january
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all right it's nice and convenient you
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got the loan in january and you pay 50 a
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month all the way through december so
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all these 50s here add up to 600
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that you paid and every month you get 50
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um you get the 50 back all right again
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we're not accounting for any interest
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you pay and stuff like that i'm trying
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to keep this as simple as possible
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so lots of times people think um
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i think some people think that what
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happens is
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you
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center a line there we go they think
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that if they pay a big chunk up front so
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let's say you pay 500 upfront in the
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first month so this is what people are
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trying to get you to do uh in these
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videos when they show this kind of thing
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to you so let's say you pay 500 bucks in
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the first month well now you only have a
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hundred dollars left because you took
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out the loan for 600 you paid 500
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you have 100 left so some people think
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well if i pay 500 up front right away
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you can get your 500 back that's the big
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benefit now you have your own cash that
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you can put to work somewhere else so
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you've got most of your cash back
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so now you have 100
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divided by 11 months well 100 divided by
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11 is gonna be like what nine point
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something nine dollars and change so
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people think oh well it reduces it from
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50 a month that i pay now
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each month to like nine dollars and
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change no it doesn't do that this is
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what it does what it does it gives you a
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zero for this month because you have a
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hundred dollar you have uh you basically
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paid 10 months ahead of time so you're
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gonna have really
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you're gonna have zero money
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uh there we go
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you're going to have zero you're
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officially going to be paying zero for
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those months because you already paid it
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up here and these last two months this
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is going to be the last hundred dollars
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that's going to give you that 600.
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so this is how it actually works
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now what you're doing with the 500
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you're basically you're prepaying for 10
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months up front so every month even
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though
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um is these are zeros you've already
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made the payment so it's going to report
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every single month that you made the
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payment this is the whole strategy that
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people um are talking about online i've
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never seen anyone actually do like a
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chart like this which i thought it might
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be pretty beneficial and pretty helpful
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for people to understand
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again just the concept of it so that's
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what you're doing
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and that's why people do this because
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they'll do this instead of having to do
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like a you know typical uh unsecured
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loan where you have to pay your
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amount every single month with the
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secured loan like this since it's your
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own cash
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you can put up your money put up 600
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bucks pay 500 of it off right away now
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you've just given yourself 10 months of
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on-time payments with this and then you
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know they'll take out the last 100 bucks
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you can get most of your money back
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right away plus you can have more than
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one pledge zone out at a time so you
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know this same concept just look at this
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say if you had um
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you know someone had let's shoot let's
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go with 50. all right let's say you had
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a 50 000 pledge loan um for
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60 months for five years you did the
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same thing
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so and you paid off let's say hey you
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paid off 45 000 of it
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you know the first month so you got
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forty five thousand dollars about you
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got ninety percent of your money back
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and now over the next five years you're
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going to use the other five grand to pay
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the rest of that off you're gonna have
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five years of payment history
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you're gonna show us a 50 000 loan that
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you had that you paid off so you but you
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may take that 45 000 after the first
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month and then
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um so you put a 50 for the for the loan
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50 000 you paid off 45 000 the first
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month you could the next month maybe you
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take out a loan another pledge loan for
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45 000 you do the same concept you could
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pay off 40 000 the first month and now
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you have another loan where you're
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paying off 5 000
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over five years so that's ten thousand
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dollars you do have locked up so if you
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have that you can afford to do that
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great you can do that for the next um
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five years on both these loans but now
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you have a 50 000 loan and a 45 000 loan
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uh reporting then you're making all
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these on-time payments you have you just
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pre-paid for years of on-time payments
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with a fifty thousand dollar loan and a
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forty five thousand dollar loan using
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your own cash so i think that helps
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maybe with bigger numbers put in
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perspective why this can be such a
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powerful tool in my people who have 10
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20 30 000 in cash will do something like
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this because um
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it can help their credit profile just
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using their own money again you can do
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it multiple times just like i said so
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hopefully this chart helps if there's
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something i had wrong something i'd
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incorrect feel free to share down in the
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comment section below i tried to make it
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simple for people to understand so
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please any feedback i'd like to hear it
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i appreciate you guys watching thank you
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for being so awesome that's it for this
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video and until next time keep growing
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your money
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