Does a loan secured by a certificate show creditworthiness? | Ask Banky

Editor-in-Chief Mohamed Salah

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Editor-in-Chief Mohamed Salah

Does a loan secured by a certificate show creditworthiness?

Asked by Banky team 2 months ago
Banky team Reviewed editorial answer

A loan secured by a certificate remains a credit facility even if the bank has strong cash collateral, and therefore can be included in your credit exposure data according to the reporting mechanism.

The collateral reduces the bank's risk but does not make the loan "non-credit." If you are applying for another loan, factor in its installment and obligation within the overall picture and don't assume that the other bank will ignore it.

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