How to Borrow against a Bank Account

If you’ve got cash in your bank account and want a loan to establish or improve your credit score, consider a few steps to take to borrow against the funds in your bank account. Lenders prefer liquid collateral, and even borrowers who have poor credit can easily qualify for a low-rate loan with cash collateral.

Go to your local bank where your accounts are held. This is always the best place to start with a loan, since the bank already knows you.

Complete the required loan application papers. Since you are an existing deposit customer, the lender will know how much you will qualify for, assuming a 100 percent loan-to-value ratio on the funds in the bank account that you wish to pledge.

If you are approved, the lender will likely have you sign a withdrawal form or write a check for the loan amount, and deposit the amount in a Certificate of Deposit (CD). The CD will be pledged as collateral for your loan, and its term will coincide with your loan term. The CD will remain in the bank's vault for security and will be released upon your payment in full.

Sign the required loan documentation forms, and your loan proceeds will be either deposited into your checking account, or you will be given a cashier’s check.


  • Since you are probably trying to improve your credit score with a cash-collateralized loan, make every payment on time.


  • You are pledging your cash as collateral, so if you default on your loan, the bank will use your cash to repay the loan in full, and report negatively to the credit bureaus.