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A secured loan requires some sort of collateral to “secure” the money you’re borrowing, as opposed to an unsecured loan without any collateral to guarantee you’ll pay it back. If you don’t pay back a secured loan, your collateral could be taken to pay your loan instead.

Here are the different types of secured personal loans and where you can find one that’s right for you.

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Where to find 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.

Types of secured loans

There are a few different types of personal loans. When applying for a secured loan, you’ll agree to put an asset up for collateral in the event you can’t pay the loan back.

  • Auto loans: Loans for cars are the most popular, but you can also get a secured loan for other vehicles, like boats or motorcycles. These vehicles serve as your security; if you don’t pay back your loan according to your terms, your vehicle can get repossessed.
  • Mortgage loans: A home loan is another popular type of secured loan. When borrowing money, you put your home up as collateral. Not making minimum payments on time every month could mean your home gets a lien or foreclosed.
  • Savings loans: Without a solid credit history, you may have a hard time taking out an unsecured loan, like a personal loan. If that’s your case, you may try to borrow with a savings loan. This is where your savings or certificate of deposit (CD) is used as collateral for a personal loan. While most personal loans are unsecured, there are some instances you can get this type of secured personal loan.
  • Car title loans: If you’ve paid your car off but want to use it as collateral for a loan, you can use a car title loan. This is where you give the lender the title to your vehicle and agree to pay back the loan or risk losing your car.
  • Home equity loans: This is another type of loan where you can use your home as collateral to take out another loan. It’s possible to have two mortgages out for the same property. Home equity loans and lines of credit are considered a “second” mortgage.
  • Secured credit card: Instead of putting up an asset as collateral, you’re using cash on hand as a deposit for a credit card. If you don’t pay back your credit card bill on time every month, your deposit is used to pay the balance.

What you can use to get a secured loan

Collateral is what you use to secure your loan. Most collateral is an asset, but it’s not the only type of collateral you can use. Here are some different types of collateral:

  • Vehicles: Car, truck, motor home, boat, etc.
  • Real estate: Home, vacation home, equity in a property you own
  • Bank accounts: Checking, savings, CDs, money markets, etc.
  • Investment accounts: Stocks, bonds, mutual funds, etc.
  • Insurance policies: Life insurance
  • Collectibles: Precious metals, art, jewelry

Compare loan rates

If you need to borrow money, make sure to compare lenders. You can also look for unsecured loans — or loans that rely on your credit score instead of collateral — to take out a loan.

If you don’t have a great credit score or you need a specific type of loan for a major purchase (like a home), however, a secured loan might be a better idea. Review all your options, instead of settling for the first one you find, so you can find the best loan for your situation.

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