encfs

EncFS provides an encrypted file system, layered on top of a normal
directory tree and encrypts individual files which are stored in the
hosting directory tree.

This has several advantages over the loopback encryption which
provided by the Linux kernel: 
- No space is and has to be reserved, encrypted files only 
  take the space that they really occupy
- Backups: encrypted files can be individually backed-up on the host
  filesystem
- Layering: Since it's hosted on a normal filesystem, encfs can be
  used on filesystems which normally have no support encryption,
  like NFS or other userspace filesystems.

EncFS is implemented as a userspace filesystem in an unprivileged
application using fuse (FUSE (Filesystem in USErspace)).