4 best secured personal loans

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In a Nutshell

A secured personal loan can provide the extra funds you need to pay for medical bills, consolidate debt or finance a major purchase. We’ve rounded up our picks for the best secured personal loans. Our choices include features such as competitive loan rates, minimal fees and flexible repayment terms.
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Secured personal loans may provide the cash you need for almost any purpose, including paying for unexpected expenses, home repairs and more.

Secured personal loans are backed by collateral, such as a savings account, certificate of deposit or vehicle. They’re often easier to qualify for than unsecured personal loans because the lender has the right to keep your collateral if you’re unable to make your payments.

If you use money from a savings account or CD as collateral, you probably won’t have access to it until you’ve repaid your loan. But if you secure your loan with a vehicle, you typically get to keep it throughout the term of the loan as long as you make your payments on time.

If you’re looking for a secured personal loan, we’ve rounded up our top picks to help you find the one that’s right for you.

Best for small loans: Regions Bank

Why Regions Bank stands out: Some personal loan lenders have minimum loan amounts of $1,500 or more. Regions Bank offers secured personal loans as small as $250, which should help you not have to borrow more than you need. But you’ll likely need strong credit to qualify.

  • Limited availability — Regions Bank serves people in 15 states across the South and Midwestern United States: Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri, North Carolina, South Carolina, Tennessee and Texas. Regions Bank finalizes secured personal loans in person at a branch, so you’ll need to live in one of these states to get a loan from this lender.
  • Collateral required — You can get a secured personal loan from Regions Bank using cash from a savings account, money market account or CD as collateral. You may be able to borrow up to 100% of the account balance.
  • No prequalification — You can’t check your estimated rate and loan term before submitting a formal loan application. Applying for a secured loan with Regions Bank will generate a hard credit inquiry, which may affect your credit scores.
  • Repayment terms — Loan terms vary based on the loan amount and type of account securing the loan.

Read reviews of Regions Bank personal loans to learn more.

Best credit union for secured personal loans: First Tech Federal Credit Union

Why First Tech Federal Credit Union stands out: You’ll need to be a member to get a loan from First Tech Federal Credit Union, but joining is relatively simple. If you’re a member or decide to become one, First Tech Federal Credit Union offers competitive rates, payment protection and potential same-day approvals.

  • Low interest rates — First Tech Federal Credit Union offers competitive rates on its secured personal loans. Rates vary based on whether you’re securing your loan with cash from a savings account, a CD or stocks you own. Loans secured with cash from a savings account or CD have lower interest rates than stock-secured loans.
  • No common fees — First Tech Federal Credit Union doesn’t charge origination, application, refinance or prepayment fees.
  • Loan payment protection — First Tech Federal Credit Union’s loan payment protection plan, which is available for an extra charge, may cancel your loan balance or payments if you’re unable to repay your loan because of death, disability or involuntary unemployment.
  • High loan amounts available — First Tech Federal Credit Union offers loans secured by cash in a savings account or CD in amounts ranging from $500 to $500,000. Stock-secured loans range from $25,000 to $1 million.

Best for bad credit: OneMain Financial

Why OneMain Financial stands out: OneMain Financial offers secured personal loans ranging from $1,500 to $20,000 and may be willing to work with you if you have less-than-perfect credit. (Your loan amount and terms may differ if you apply through Credit Karma.)

  • Higher rates — Because OneMain Financial works with people who don’t have great credit, its secured personal loans also have higher interest rates than some other lenders.
  • Several fees — OneMain Financial charges a number of fees on its secured personal loans, including an origination fee, a late fee and an insufficient funds fee.
  • Motor vehicle required — Unlike some other lenders in this review, loans from OneMain Financial are secured with a vehicle — such as a car, truck, motorcycle, boat, camper or RV — instead of cash or a CD. You must maintain full coverage insurance on your vehicle for the entire loan term if you use it as collateral.
  • Ability to apply for prequalification — OneMain Financial uses a soft credit inquiry to let people check their estimated rates and loan terms without affecting their credit scores. But keep in mind your final approval and terms may change if you officially apply.

Read reviews of OneMain Financial personal loans to learn more.

Best for online lending: Upgrade

Why Upgrade stands out: If you like the convenience of a digital process, you can apply for a secured personal loan online with Upgrade. Upgrade offers personal loans from $1,000 to $50,000, and you can apply for prequalification to see estimated terms without hurting your credit.

  • Auto-secured loan — If you do qualify for an Upgrade secured personal loan, you’ll use your car as collateral. Keep in mind that’s a risk, since you could lose your vehicle if you can’t make repayments and end up defaulting on your loan.
  • Required documents — If you’re approved for an auto-secured loan, you’ll need to submit a few documents, including your vehicle registration card, insurance card/policy declarations page, and maybe your government-issued ID and paystubs. There is one part of the process you can’t complete online: If approved, you’ll need to mail in a signed limited power of attorney form. You may also have to submit your car’s original title.
  • Vehicle requirements — To be eligible, your vehicle will also have to meet a few basic requirements. Your car can’t be 20 years old or older and must be for personal (not commercial) use. You’ll need to show it’s insured and the registration matches the name on your loan application. And the car has to have a clean title that’s free of any liens or lease obligations.

See reviews of Upgrade personal loans to learn more.

What you should know about secured personal loans

When you take out a secured personal loan, you risk losing the assets you pledged as collateral. If you don’t repay the loan, you could end up losing your vehicle, home, money or other property that’s guaranteeing the loan.

The process of seizing collateral varies depending on the type of collateral and your state laws. Your loan contract should outline when lenders can take the collateral and what they must do to seize your assets. In some cases, they can take the property serving as collateral without providing advance notice — so it’s important to read your loan agreement carefully to understand your  rights.

When a lender seizes property for nonpayment, it will likely sell it and use the proceeds to pay off your debt and cover any costs associated with recouping its losses.

You’ll only get money from that sale after the lender has been paid in full. If the sale doesn’t generate enough to repay what you owe, the lender might try to collect the difference from you.

Where can you get a secured personal loan?

Secured personal loans can be obtained from banks, credit unions and online lenders. To apply for a secured personal loan, shop around and compare interest charges, collateral requirements and repayment terms.

If you’re looking into a car title loan or a pawn shop loan, consider other options first. These loans can be very costly, with lenders usually charging high interest and a host of fees.

Other examples of secured loans are car loans and mortgage loans — they’re backed by the property you purchase.

How to get a secured personal loan

If you’ve decided to borrow using a secured personal loan, you’ll want to compare loan terms and loan offers among different lenders. There are several things to consider when shopping around.

  • The interest rate — How much will you pay for the privilege of borrowing money? Some secured loans, such as car title loans, are targeted to borrowers with bad or little credit and no other options. These loans can be very expensive. On the other hand, some secured loans, such as home equity loans, may have lower rates than other types of loans.
  • The loan term — How long do you have to repay the loan? A shorter repayment period means higher monthly payments, but you’ll pay less interest over time because your debt will be paid back more quickly.
  • Fees associated with the loan — You may need to pay an application fee, a loan origination fee, monthly fees and the costs of an appraisal to determine the value of your property. Car title loans, in particular, tend to have very high fees, which is part of what makes them a bad option for many borrowers.
  • The monthly payment — Make sure you don’t take out a secured loan that isn’t affordable on a monthly basis. Not meeting your monthly payments could mean you’ll lose the collateral.
  • The collateral requirements — What property do you own that the lender will accept as collateral? Some lenders only accept a paid-off vehicle, while others could be willing to accept a savings account.
  • The time it takes to obtain the money — In certain circumstances, it may be faster to obtain a secured loan than an unsecured loan.
  • The amount you can borrow — Find out the loan minimum and maximums.

Once you’ve found a lender offering a loan you think you can qualify for with reasonable terms, you can submit an application. If your application is approved, you’ll receive the borrowed funds and begin loan repayment.

Next steps: Is a secured personal loan right for you?

A secured personal loan might not be your first choice. You may decide to apply for a secured personal loan if you can’t qualify for an unsecured loan or can get a lower interest rate than with an unsecured personal loan.

That doesn’t mean secured personal loans are a bad option. These terms often work well for people who can make their monthly payments on a steady schedule. People who don’t have strong credit can also build credit by borrowing and repaying the loan as agreed over time.

But there are many shameless lenders targeting bad-credit borrowers with secured loans that are very costly. For instance, car title loans can come with monthly fees and interest as high as 25% of the borrowed amount, for an APR of roughly 300%. Before borrowing, research your loan terms and lender carefully, and stick with reputable lenders.

Most crucially, make certain you’re 100% confident you can repay the loan. If you’re not, you’re taking the chance of losing your money or property, as well as taking a hit to your credit.

How we picked these loans

We reviewed more than a dozen secured personal loans. The criteria we used to come up with our top picks included interest rates, fee structures, availability, loan amounts, repayment terms and funding timelines.

Weigh your options

To better understand the total cost of any personal loans you’re considering, use an online calculator like Credit Karma’s simple loan calculator. A loan calculator can help you estimate your monthly payment and how much you’d pay in interest versus principal over the length of the loan.

About the author: Jennifer Brozic is a freelance financial services writer with a bachelor’s degree in journalism from the University of Maryland and a master’s degree in communication management from Towson University. She’s committed… Read more.