To take out a secured personal loan, you’ll need some sort of collateral to secure the money you borrow. For example, you could use a car as collateral for an auto loan.
This also means that if you don’t repay your secured loan, you could lose your collateral.
4 lenders that offer secured personal loans
While most personal loan lenders offer only unsecured loans, there are some that allow borrowers to secure personal loans with collateral. Here are three Credible partner lenders that offer secured personal loans, followed by one stand-out non-partner lender.
Credible rating
Fixed (APR)
8.49% - 35.99%
Loan Amounts
$1000 to $50000
Min. Credit Score
600
Credible rating
Fixed (APR)
8.99% - 35.99%
Loan Amounts
$2000 to $50000
Min. Credit Score
600
Credible rating
Fixed (APR)
18.00% - 35.99%
Loan Amounts
$1500 to $20000
Min. Credit Score
540
All APRs reflect autopay and loyalty discounts where available | LightStream disclosure | SoFi Disclosures | Read more about Rates and Terms
Navy Federal
Navy Federal is a credit union that offers personal loans secured by your savings account or certificate of deposit (CD). The rate you'll pay is the rate on your savings or CD account plus 2%. Unless you opt for a long term loan, which is one over 60 months to as long as 180 months, and is only available if secured by your savings.
What is a secured personal loan?
A secured personal loan is a type of personal loan that is secured by some type of collateral. This differs from most personal loans, which are generally unsecured.
Secured personal loans can be less risky for lenders than unsecured personal loans, as the lender can take the collateral to make up for any losses if you stop paying on the loan.
Because of the reduced risk, you might be able to get a larger loan amount or lower APR with a secured personal loan compared to an unsecured personal loan.
Check Out: How to Get a $5,000 Personal Loan
Where to get a secured personal loan
You can find secured loans through a few different places. Make sure to review all your options before taking out a secured personal loan.
- Online lenders: While there are many online lenders that offer personal loans, you’ll have to do your research to find out which ones offer secured ones. LightStream, however, does offer motorcycle and new car loans as secured loans.
- Banks: Many brick-and-mortar banks offer home and auto loans, but Wells Fargo is the only major national bank that offers a secured personal loan where you can secure a loan through your personal savings account.
- Credit unions: Your local credit union may offer a few different secured loans, including mortgages, vehicles, and some for personal reasons. Some national credit unions offer secured personal loans, like Navy Federal Credit Union, but it’s best to check with the ones in your community first.
See: Where to Get a Personal Loan
Are secured loans easier to get?
Because of the lower risk to the lender, secured loans are often easier to get than unsecured loans. If you have poor or even no credit, you might still be able to qualify for a personal loan if you can provide collateral for a loan.
Secured personal loans generally offer higher loan amounts as well, which could make it easier to access enough funds for your personal needs.
What can I use as collateral for a secured personal loan?
You can generally use anything of value as collateral, though it will ultimately depend on the lender. Some common items used for collateral include:
- Cars
- Trucks
- Motorcycles
- RVs
- Boats
- Savings accounts
- Investments
- Life insurance
- Precious metals
- Art
- Jewelry
Remember
If you can’t make your payments on a secured personal loan, you could end up losing what you put up as collateral. This might be your car, your savings, or even your house, depending on the type of secured loan you have.
What are the pros and cons of a secured personal loan?
While a secured personal loan might be a good idea depending on your situation, here are a few pros and cons to consider first:
Pros
- Typically offer with larger loan amounts
- Might come with lower interest rates than unsecured personal loans
- Could be easier to qualify for
- More options for borrowers with poor or no credit
Cons
- Have to provide collateral, which not all borrowers have
- Generally have shorter repayment terms, which can mean higher loan payments
- Risk of losing your collateral if you can't make your payments
Learn More: How to Get a $20,000 Personal Loan
Alternatives to secured personal loans
If a secured personal loan doesn’t seem right for you, there are also other options available. Here are a few alternatives to think about:
- Unsecured personal loan: If you don’t want to put any collateral at risk, an unsecured personal loan might be a better choice. Although unsecured personal loans generally have higher interest rates, you might get a longer repayment term — which could make your monthly payments more manageable. Some lenders also offer personal loans for bad credit.
- Credit card: If you only need small loans, a credit card could be a less risky option than a secured personal loan — and you’ll be able to borrow more than once. Plus, if you’re able to pay off the amount you borrowed by the due date, you won’t pay any interest. Just keep in mind that if you can’t repay your balance by that date, you might be stuck with hefty interest charges.
- Family or friend loan: You might consider asking a trusted family member or friend for a loan to help you out. However, this could put a strain on your relationship if you fail to repay the loan, so be sure to borrow wisely.
Is getting a secured loan a good idea?
A secured personal loan could be a good choice if you need a larger loan amount or are having trouble qualifying for an unsecured personal loan.
If you have poor or no credit, a secured loan could also help you rebuild or start your credit history.
Tip
Even if you can get a personal loan without collateral, a secured loan might still be a good option if you’d like to get a lower interest rate and save on your overall loan cost.
Just remember that secured personal loans typically have shorter repayment times, meaning you’ll likely have higher loan payments.
If you decide to take out a personal loan — whether secured or unsecured — be sure to consider as many lenders as possible to find the right loan for your needs. Credible makes this easy — you can compare multiple lenders in two minutes.
