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Purchasing CD with Loan Proceeds

Question: 
Can a Certificate of Deposit be purchased with loan proceeds and that CD be pledged as the collateral?
Answer: 

by Jim Bedsole:

I don't know of a reason why not, but one would question the real purpose of such a loan. I can only think of two reasons: 1) A sort of self-imposed mandatory savings program for someone who might not be disciplined enough to save the money other than making loan payments; or 2) Money laundering

Answer: 

by Richard Insley:

Maybe it's part of a personal credit score rehab project?

First published on 08/14/2016

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