Best Secured Loans in 2025

Secured loans require collateral, are typically easier to qualify for and could be a good choice if you have bad credit

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Written by
Carol Pope
Updated on: April 17, 2025

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Secured personal loan lenders at a glance

Best Egg: Best secured loans for homeowners

7.99% - 29.99%

36 to 84 months

$2,000 - $50,000

Home fixtures

0.99% - 9.99%

Pros
  • Doesn’t use your entire house as collateral, just your fixtures
  • Accepts credit as low as 580
  • Can also borrow against your car with a vehicle equity loan
Cons
  • Will be hard to sell your home until your loan is repaid
  • Must make at least $100,000 a year and have 700+ credit to get lowest rates
  • Will keep at least 0.99% out of your loan as an origination fee

What to know

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Best Egg’s Secured Loan + Homeowner Discount is a unique loan that uses your home’s fixtures as collateral. By fixtures, Best Egg means bathroom vanities, built-in cabinets and shelves, and other elements permanently attached to your home.

It will be hard — if not impossible — to sell your home while you’re paying off your loan. If you stop paying, Best Egg will repossess the home’s fixtures. That’s a risk that many homebuyers aren’t willing to take.

How to qualify

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Best Egg uses your home’s permanent fixtures as collateral, but no appraisal is needed. Instead, Best Egg will review your credit history and home equity to see if you qualify.

You must also meet the requirements below to qualify for a Best Egg loan:

  • Citizenship: Be a U.S. citizen or permanent resident living in the U.S.
  • Administrative: Have a personal checking account, email address and physical mailing address
  • Residency: Not live in the District of Columbia, Iowa, Vermont, West Virginia or U.S. territories
  • Credit score: 580+
See Personalized Results Read Our Expert Review

Digital Federal Credit Union (DCU): Best secured loans for rebuilding credit

Starting at 3.50%

Up to 120 months

Up to your savings account balance

Savings account

None

Pros
  • Loan specifically designed to help you rebuild your credit
  • Can skip a payment once every 12 months, up to three times per loan
  • Customer service available via live chat
Cons
  • Requires you to have cash in a DCU bank account
  • DCU is a credit union, so must become a member first
  • Must pay a small fee ($10+) to join a partner organization if you don’t qualify through work or where you live

What to know

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If you’re looking for fast cash, this loan won’t work. Digital Federal Credit Union’s Savings-Secured Loan is designed to improve your credit. In order to borrow money, you have to have funds in your DCU share (or savings) account. Then, you can borrow up to your account balance.

DCU reports your payments to the major credit bureaus, including TransUnion, Experian and Equifax. If you make your payments on time, your credit score should tick up. You have to join DCU before you can open an account or get a loan. If you don’t qualify for membership through traditional means, you can join a partner organization. Organization memberships come with fees ranging from $10 to $120+.

How to qualify

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As a credit union, you must be a DCU member to take out a loan. It does not specify its minimum credit score requirements, but to join the credit union, you must:

  • Live, work, worship or go to school in certain Massachusetts communities
  • Work for a participating employer
  • Join a participating association (annual dues between $10 and $120+)
  • Open a DCU savings account with a deposit of at least $5
See Personalized Results

OneMain Financial: Best for bad credit, same-day secured loans

18.00% - 35.99%

24 to 60 months

$1,500 - $20,000

Car (less than 10 years old), motorcycle, boat, trailer or RV

$25 to $500, or 1.00%-10.00%

Pros
  • Can send money to your bank account the same day you finish your loan
  • Also accepts motorcycles, boats, RVs and trailers (many lenders only take cars) as collateral
  • Has physical branches in case you want in-person help
Cons
  • Although you can qualify with a 500 credit score, rates are high
  • Charges expensive origination fees, late payment fees and returned payment fees
  • Can only borrow up to $20,000

What to know

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It can be hard to get a same-day loan when you have bad credit. With OneMain, you could have your loan within an hour of signing your documents. You just need a debit card and to agree to get your funds via direct deposit.

You can qualify for a OneMain Financial secured loan as long as you have a 500 credit score. But just like any bad credit loan, expect high rates and fees. OneMain requires your car to be 10 years or newer if you want a big loan. It might accept a car older than that on smaller loans.

How to qualify

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OneMain Financial isn’t very transparent about its personal loan eligibility requirements, but it’s possible to qualify even with a credit score as low as 500. Before closing on a loan, you’ll be required to provide:

  • Government-issued identification (such as a driver’s license or passport)
  • Proof of residence (such as a rental agreement or utility bill)
  • Proof of income (such as pay stubs or tax returns)

OneMain loans are not available in Alaska, Arkansas, Connecticut, District of Columbia, Massachusetts, Rhode Island, Vermont or in U.S. territories.

See Personalized Results Read Our Expert Review

Upgrade: Best secured loans on older cars

7.99% - 35.99% (with discounts)

24 to 84 months

$1,000 - $50,000

Car less than 20 years old

1.85% - 9.99%

Pros
  • Cars up to 20 years old can qualify
  • Can still qualify with a 580 credit score
  • Can change your due date online
Cons
  • Have to mail in a form before you can get your loan
  • Only accepts cars, no motorcycles or RVs as collateral
  • Will deduct 1.85% - 9.99% from your loan funds as an origination fee

What to know

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Online loan marketplace Upgrade uses your car as collateral on its secured loans. Every lender has its own collateral rules, one of them is vehicle age. Upgrade accepts cars up to 20 years old. Some lenders and companies have a cutoff of 10 years.

Most of Upgrade’s process is online, but you do need to mail in one form (a Limited Power of Attorney). Until Upgrade gets this form, it can’t send your loan. You might also be required to get the form notarized.

How to qualify

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To qualify for a loan through Upgrade, you must meet the requirements below:

  • Age: Be at least 18 years old (19 in some states)
  • Citizenship: Be a U.S. citizen or permanent resident or live in the U.S. with a valid visa
  • Administrative: Have a valid bank account and email address
  • Credit score: 580+

To get an auto-secured loan, your car must be:

  • Less than 20 years old and have a clean (not salvage) title
  • Used for personal reasons (not business or commercial)
  • Insured
  • Registered in your name and current on taxes/registration
  • Paid off (not financed or leased)
See Personalized Results Read Our Expert Review

What is a secured loan?

A secured loan is a personal loan that’s tied to a personal item. This personal item is called collateral, and it works like a guarantee for the lender. If you don’t pay back your loan, the lender can take your collateral.

Online lenders usually accept cars as collateral. Banks and credit unions generally use your savings or investment account.

Secured loans vs. unsecured loans

There are three main reasons why people choose secured loans versus unsecured loans:

→ It’s generally easier to get a secured loan. You’re less likely to stop paying a secured loan because you don’t want to lose your collateral. Collateral takes away some of the lender’s risk. The less risky you are, the more likely it is that you’ll be approved.

→ Secured loans usually come with lower rates. If you stop paying, your lender can sell your collateral to recoup some of its losses. This also reduces your risk and ultimately, your rate.

→ Secured loans can help you improve your credit score. Some people with bad or no credit get a smaller secured loan and make on-time payments to beef up their credit history and credit score. Your payment history makes up 35% of your credit score. Credit history (or how long you’ve had credit) accounts for 15%.

On this page

How secured loans work

Secured loans are a type of installment loan. After the lender approves you, you’ll get your money as a lump sum. Then, you’ll pay back what you borrowed in equal monthly payments, plus interest.

With a secured loan, you need to make sure that both you and your collateral meet the lender’s requirements. If your application is approved, the lender will place a lien on your collateral. In the meantime, you’ll keep the collateral and can continue using it.

What happens next depends on you.

  • If you finish paying your loan with on-time payments, the lender will remove the lien from your collateral. You are no longer at risk for repossession.
  • If you stop making payments, the lender can repossess your collateral. You might be able to get collateral back by getting caught up on your loan, but only if the lender doesn’t sell it first.
Considering using your car as collateral? Make sure you have the right car insurance. The lender will almost certainly require you to have full coverage (comprehensive and collision).

Also, you usually have to own your car outright to use it for a secured loan. If you’re still making payments, consider an auto equity loan instead.

Other types of secured personal loans

We’ve already touched on auto-secured and savings-secured loans, but those aren’t the only options out there. Other secured personal loans include:

  • Certificate of deposit (CD) loan: This loan uses an existing CD as collateral. A CD is a type of investment account that you usually get from a bank or credit union. You can usually borrow up to the amount in your CD.
  • 401(k) loan: This one is a bit different from a personal loan. If you have a 401(k), which is a retirement savings plan from your job, you might be able to borrow money from it as a 401(k) loan. The interest you pay goes back into your own 401(k). But, leaving your job early may require repaying the loan all at once or facing a penalty.
  • Home equity loan or HELOC: Home equity loans and HELOCs use the equity you’ve built up in your home as collateral. These loans also aren’t personal loans, but they tend to offer large loan amounts at affordable interest rates. However, if you’re unable to repay the loan, the lender can seize your home.
 Beware: Secured loans and predatory lending

Secured loans for bad credit borrowers often fall under predatory lending. For context, most financial experts agree that a loan may be predatory if it charges rates that are higher than 36%. Due to high interest rates or excessively short repayment terms, avoid the loans below.

Title loans: Car title loans are like car-secured loans but come with excessively high APRs and short loan terms (around 30 days).

Pawn shop loans: Here, the pawn shop will give you a loan based on the value of your item, but much less than what it’s worth. You could have several weeks to several months to pay back your loan, interest and fees, depending on where you live.

Pros and cons of secured loans

ProsCons
Lower rates. Secured loans typically have lower interest rates than unsecured loans.

Easier to qualify for. Secured loans could be a good option if you’re building credit or have a lower score.

Higher loan amounts. Offering collateral can help qualify for a bigger loan. 		Can be risky. Aside from hurting your credit score, not paying back a secured loan means you can lose your collateral.

Not as common. Most personal loans are unsecured.

Can be predatory. Certain types of secured loans (like title loans and pawn shop loans) can be predatory. You can find plenty of predatory loans online, too.

Possible fees. Can come with an origination fee. The lender will take this out of your loan before sending it to you.

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Applying for secured loans with bad credit

If you have shaky credit, you may want to improve your score before applying to make it more likely the lender will approve you. Here are some tips to make it happen.

  • Know how much your collateral is worth: Lenders don’t typically approve larger loans if you have bad credit. Finding out how much your collateral is worth before applying can give you a better idea of how big of a loan you can ask for.
  • Check your credit scores and reports: Don’t get penalized for incorrect or outdated info. Get a free copy of your credit report from AnnualCreditReport.com and dispute errors you might find.
  • Lower your debt-to-income ratio: Your debt-to-income (DTI) ratio measures how much of your monthly income goes toward paying down what you already owe. If your DTI ratio is above 35%, consider paying down your current debts before applying for another loan.
 Supercharge your score

Get free, personalized recommendations on how to improve each of the factors that affect your credit score with LendingTree Spring. We’ll show you how your credit stacks up and what to do to boost your score.

Alternatives to secured personal loans

 If you need money now

  • Buy now, pay later (BNPL): You can split up purchases (including groceries and in some cases, bills) by using BNPL. The most common plan is Pay in Four. You’ll pay 25% down and pay off your remaining balance over four installments due every two weeks.
  • Auto equity loan: Auto equity is how much value you have in your vehicle, minus what you currently owe on your auto loan and depreciation. An auto equity loan lets you borrow from that.
  • Joint loan: A joint loan is a personal loan that you share with another person. Joining forces with someone who has good credit can help you get approved if you don’t qualify for a loan by yourself.

 If you need to establish or improve your credit

  • Secured credit card: A secured credit card works like a regular credit card, except that you’ll make a cash deposit. This serves as your credit limit. You can borrow against it as needed, up to your deposit amount.
  • Credit-builder loan: You don’t actually borrow money with a credit-builder loan. Instead, you’ll give the lender a lump sum of money. Then, you’ll make monthly payments to unlock those funds. The lender will report your monthly payments to the credit bureaus, helping you establish credit history.

How we chose the best secured personal loans

We reviewed more than 9 lenders that offer secured personal loans to determine the overall best four options. To make our list, lenders must offer secured loans with competitive APRs. We also considered the type of collateral each lender requires. From there, we prioritized lenders based on the following factors:

  • Accessibility: Lenders are ranked higher if their personal loans are available to more people and require fewer conditions. This may include lower credit requirements, wider geographic availability, faster funding and easier and more transparent prequalification and application processes.
  • Rates and terms: We prioritize lenders with more competitive fixed rates, fewer fees and greater options for repayment terms, loan amounts and APR discounts.
  • Repayment experience: For starters, we consider each lender’s reputation and business practices. We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide any unique perks to customers, like free wealth coaching.

According to our systematic rating and review process, the best secured personal loans come from Best Egg, DCU, OneMain Financial and Upgrade.

Frequently asked questions

Secured loans are easier to qualify for than unsecured loans, but that doesn’t mean everyone is approved. Even if you offer collateral, you’ll still need to meet the lender’s credit requirements. The lender will also have rules about what it will accept as collateral.
 
The best way to see if you’re eligible is by prequalifying for a personal loan. Prequalification only uses a soft credit pull so it doesn’t hurt your credit score.

A secured loan can be a good idea for the right person, especially if you have less-than-perfect credit or want a lower rate. Secured loans come with extra risk, though. The lender can repossess your collateral if you get too far behind. Always use a personal loan calculator before to make sure you can afford a monthly loan payment.

Upgrade offers auto-secured loans to borrowers with credit scores 580 and higher. But ultimately, the credit score needed for a personal loan varies by lender (which is why it’s so important to shop). Also, the lower your score, the higher your rate. Generally, you’ll need at least good credit (670+) before rates start to become more affordable.