Best Secured Loans in 2024

A variety of secured personal loans with low rates and flexible terms

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How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
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Best secured personal loans in 2024

Written by Carol Pope | Edited by Jessica Sain-Baird and Pearly Huang | Updated October 25, 2023
How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
LenderBest for…APRsLoan termsLoan amountsCollateral required
Best Egg logoSecured loans for homeowners5.99% - 29.99%36 to 84 months$2,000 - $50,000Home fixturesSee Personalized Results
Digital Federal Credit Union logoSecured loans with flexible term lengthsStarting at 3.50%Up to 120 monthsUp to your savings account balanceSavings accountSee Personalized Results
First Tech Federal Credit Union logoLarge secured loansStarting at 3.00% + certificate account rateUp to certificate maturity$500 - $500,000CD accountSee Personalized Results
Regions Bank logoSmall secured loansStarting at 4.00%Varies based on loan amountStarting at $250, minus feesSavings accountSee Personalized Results
Upgrade logoSecured loans for bad credit8.49% - 35.99%24 to 84 months$1,000 - $50,000Car less than 20 years oldSee Personalized Results

We chose the loans above based on certain types of collateral. Please note that some of these lenders offer other secured loans that may better suit your needs, depending on the collateral you’re willing to put up.

Secured loan lenders at a glance

Best Egg logo

Best Egg: Best secured loan for homeowners

APRs5.99% to 29.99%
Loan amounts$2,000 - $50,000
Loan terms36 to 84 months
Origination fee0.99% - 8.99%
Collateral requiredHome fixtures
ProsCons

  Does not use home itself as collateral

  Extended loan term available

  Competitive APRs for excellent-credit borrowers

  Requires an origination fee

  Must be a homeowner

  May default if you sell your home before loan is repaid

See Your Personalized Results

DCU logo

Digital Federal Credit Union: Best secured loan with flexible term lengths

APRsStarting at 3.50%
Loan amountsUp to your savings account balance
Loan termsUp to 120 months
Origination feeNone
Collateral requiredSavings account
ProsCons

  Skip-A-Payment program available in case of financial hardship

  Live chat

  120-month loan term

 Must have DCU savings account

 Physical branches only in MA and NH

 Fee required to join a participating organization if you don’t meet DCU’s other membership eligibility requirements

See Your Personalized Results

First Tech logo

First Technology Federal Credit Union: Best large secured loans

APRsStarting at 3.00% + certificate account rate
Loan amounts$500 - $500,000
Loan termsUp to certificate maturity
Origination feeNone
Collateral requiredShare certificate account
ProsCons

 Offers extra-large loans to those with extra-large share certificate accounts

 Share certificate continues to earn dividends as you pay your loan

 Highly-rated mobile app

  Must have First Tech certificate account

  Must meet membership eligibility requirements

  Physical locations only in California, Oregon and Washington

See Your Personalized Results

Regions Bank logo

Regions: Best small secured loans

APRsStarting at 4.00%
Loan amountsStarting at $250, minus fees
Loan termsVaries based on loan amount
Origination feeNone
Collateral requiredSavings account
ProsCons

  Low minimum loan amount

  No origination fee

  Interest rate discount may be available for automatic payments

  Only available in 16 states

  Higher APR than some

  Charges late payment fee

See Your Personalized Results

Upgrade logo

Upgrade: Best secured loans for bad credit

APRs8.49% - 35.99%
Loan amounts$1,000 - $50,000
Loan terms24 to 84 months
Origination fee1.85% - 9.99%
Collateral requiredCar less than 20 years old
ProsCons

  Low minimum credit score required

  84-month term available

  Don’t need to tie up money in a certificate or savings account

  Potential for high origination fee

  Not all cars qualify as collateral

  High maximum APR

See Your Personalized Results

What is a secured loan?

A secured loan is a type of personal loan that requires collateral. Collateral could be personal property like your home or your car. Collateral could also be money, typically held in a savings or investment account. If you don’t pay back your loan, the lender can take ownership of your collateral. This is called repossession.

When comparing secured vs. unsecured loans, secured loans are easier to qualify for and usually come with a lower interest rate. This is because putting collateral on the line reduces some of the lenders’ risk. In other words, the lender can recoup something of value, even if you default on your loan.

Secured loans and bad credit

Secured loans can be a good option if you’re working on your credit score. Not only are they easier to qualify for, but making your monthly payments on time can increase creditworthiness if you want to borrow money in the future.

However, some kinds of secured loans (which typically target bad-credit borrowers) fall under predatory lending, including:

  • Title loans: In exchange for a loan, you’ll give your car title to the lender. If you don’t pay your loan back, it can repossess your vehicle. Although this doesn’t sound too different from a regular auto-backed loan, title loans come with excessively high APRs and short loan terms (around 30 days).
  • Pawn shop loans: Under this model, you’ll give a pawn shop a valuable personal item. Jewelry, for instance. The pawn shop will give you a loan based on the value of your item (but much less than what it is appraised for). You’ll have 30 to 60 days to pay back what you borrowed, plus fees. Otherwise, the pawn shop can sell your collateral.

Types of secured personal loans

Secured loans aren’t as common as unsecured loans, but you may find them by contacting banks, credit unions and online lenders. Depending on the lender, you might have more than one secured loan option to choose from, each requiring different kinds of collateral.

Savings-secured loan

A savings-secured loan uses a savings account or money market account as collateral. Your maximum loan amount usually equates to the amount of money you have in your account.

While your loan is active, your savings account will continue to earn interest. You will also pay interest on what you borrowed. However, you can’t withdraw the funds from the account until you’ve paid off your loan.

Certificate or CD loan

Before you can decide if this loan is right for you, you should know how certificate and CD accounts work.

First, the terms “certificate” and “CD” are interchangeable. Credit unions call this product a certificate, while banks call it a CD. On certificates, you earn dividends. On CDs, you earn interest. Regardless, these accounts are investment vehicles similar to a savings account, with a few notable differences.

Unlike a savings account, you can’t withdraw your money from your certificate account any time you want. Instead, you’ll choose a term length that can range from one week to 5+ years. If you want to withdraw during your term, you’ll have to pay a penalty. When your term is over, your certificate is considered “mature.”

Certificate accounts also typically earn more interest than standard savings accounts.

When it comes to loans, savings-secured and certificate/CD loans work the same way — you borrow against your account, pay interest on what you borrow and continue to earn interest on the funds held in your account. You also can’t access your funds until your loan is paid off. But in the case of certificate and CD loans, your certificate or CD must also be matured. Otherwise, the early withdrawal penalty applies.

Property-secured loan

With a property-secured loan, the lender will hold a piece of your property as collateral. Car loans and mortgages are property-secured loans. However, these aren’t considered personal loans, since the loan pays for the collateral (your car or your house).

Instead, personal loans disburse funds in a lump sum that can be used for nearly anything. That said, a popular property-secured personal loan option is an auto-backed loan. Here, the lender will put a lien on your car and disburse your personal loan. If you don’t stick to your loan agreement, it can repossess your vehicle.

Secured loans pros and cons

Borrowing money through a secured loan is not the best option for everyone. Not keeping up with your payments can tank your credit score, and to make things worse, you lose your collateral. Review the pros and cons below before committing.

ProsCons

  Attractive terms. Secured loans tend to have lower APRs than unsecured loans.

  Looser requirements. Compared to secured loans, unsecured loans are usually easier to qualify for if you have bad or fair credit.

  Predictable billing. Like on other personal loans, APRs are fixed. This means your payments will be the same each month.

  Can be risky. The lender may repossess your collateral if you fail to pay.

  Hard to find. Not all lenders offer secured loans, and you may need to join a credit union to get one.

  May come with fees. Some personal loans come with an origination fee.

How to apply for a secured personal loan

Applying for a personal loan, secured or unsecured, follows a similar process.

Review your finances

Before taking on debt, it’s essential to make sure that you pay back what you intend to borrow. Just one missed payment can drop your credit score by as much as 180 points. In the case of a secured loan, you’ll also lose your collateral.

Use our personal loan calculator to get an idea of how a secured loan may impact your budget. You should also do some research to make sure the size of your future loan is appropriate for your needs. For instance, if you’re looking for a home improvement loan, you may want to get a few bids on the work you need done.

Choose your collateral (carefully)

Next, you should decide what you’re willing to put up as collateral. Some lenders specialize in savings-secured and certificate-secured loans, and others only offer property-backed loans. If you’re using property as collateral, it may be a good idea to have your collateral appraised (or at least know its value).

Put thought into your collateral. Remember — the lender can seize it if you can’t pay back your loan. Although putting your home on the line could net you a bigger loan, it may be a big gamble.

Shop around

Contacting a few lenders to prequalify for a personal loan can help you find the offer with the best terms. Prequalification should be a quick process and doesn’t negatively impact your credit score.

Here, the lender will ask for information like your name, contact information and basic income details. Then, it will let you know if you might be approved for a loan, and at what APR. Prequalification doesn’t guarantee approval, but it will give you an idea of where you stand with the lender.

Formally apply

Once you’ve compared offers and chosen the loan that’s best for you, you need to submit a formal application. The lender will ask for more detailed information, and you’ll probably need to submit documents like paystubs, bank or tax statements.

Some lenders provide approval decisions in a few minutes. Others can take days or even weeks. For this reason, review lenders’ funding timelines before choosing your loan.

Receive your loan

The lender will disburse your loan after it approves you. Again, the timeline for loan disbursement can vary. You might get same-day funds, or you may need to wait a few days. Either way, many lenders send funds via direct deposit to your checking account. If you’re taking out a debt consolidation loan, it may send your funds directly to your creditors.

Enter repayment

Your first loan payment is usually due about 30 days after you receive your funds. Pay close attention to your repayment schedule and stick to it. If you’re having trouble keeping up with your payments, contact your lender immediately — some may offer financial assistance if you fall on hard times.

Alternatives to secured personal loans

Taking a one-size-fits-all approach to any financial product can be a surefire way to find yourself worse off than before you borrowed. Here are some alternatives to secured loans that may better suit your needs.

Joint loan

A joint loan is a personal loan (typically unsecured) that you share with another person. Adding a creditworthy person to your loan application can be an effective strategy if you don’t qualify for a loan on your own.

However, there are some things to keep in mind before taking out a joint loan. For starters, the person you add has the same access to the loan funds as you. Additionally, both of your credit scores will be impacted if you make late payments or default.

Secured credit card

If your main goal is building credit, you may want to consider a secured credit card.

In some ways, a secured credit card isn’t too different from a secured loan. To get a secured card, you’re required to put down a cash deposit. This serves as collateral and sets your spending limit. When you close your card (and graduate to an unsecured card, perhaps), the credit card company will return your deposit.

However, a secured credit card works like a standard credit card. It provides a line of credit rather than a lump sum like a loan.

Home equity loan

A home equity loan (sometimes called a second mortgage) allows you to borrow against the equity in your home. Like a regular mortgage, the lender will use your home as collateral. If you don’t pay your home equity loan, you could be out of house and home.

This option may be best for borrowers with at least good credit, as most home equity lenders have a minimum credit requirement of 620.

How we chose the best secured personal loans

We reviewed more than 10 lenders to determine the overall best five personal loans. To make our list, lenders must offer secured loans with competitive annual percentage rates (APRs). From there, we prioritize 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.

Frequently asked questions

Secured loans aren’t inherently good or bad, but whether they are a good idea depends on your situation and the terms you qualify for. You must also consider the possibility of losing your collateral. Reviewing your budget, risk tolerance and loan offers can help you decide if a secured loan is right for you.

Secured loans aren’t necessarily easy to get, but they are easier to get than an unsecured loan. This is because you risk losing your collateral if you don’t pay back your loan. Still, not all applicants will qualify. You must still meet the lender’s eligibility requirements before it will approve you for a secured loan.

Usually, but the minimum credit score needed for a secured loan is typically lower than that of an unsecured personal loan. If you have no or bad credit, you may want to look into a no-credit-check personal loan, instead. APRs on these types of loans are high, but they can come in handy when used responsibly or during a financial emergency.