Best of

Best Secured Personal Loans of 2024

Secured loans may have lower interest rates, but they also carry risk.

Annie Millerbernd
By
Last updated on February 16, 2024
Edited by
✅ Fact checked and reviewed
Kim Lowe
Edited by
✅ Fact checked and reviewed

Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.

  • 35+ personal loans reviewed and rated by our team of experts.
  • 20+ years of combined experience covering personal loans and financial topics.
  • Objective, comprehensive star rating system assessing 20+ categories and 70+ data points.
  • Governed by NerdWallet's strict guidelines for editorial integrity.
NerdWallet's personal loans content, including articles, reviews and recommendations, is produced by a team of writers and editors who specialize in consumer lending. Their work has appeared in The Associated Press, USA Today, The New York Times, MarketWatch and many other national, regional and local publications. They have been cited in publications including The Harvard Kennedy School, and appeared on NerdWallet's "Smart Money" podcast as well as local TV and radio.

New year, new finances – achieve your goals with a loan

A personal loan can help you turn your resolutions into reality. Just answer a few questions to get personalized rate estimates from multiple lenders.

Won’t affect your credit score
Featured partners for Personal Loans
See all Lenders
SoFi Personal Loan
SoFi Personal Loan
SoFi Personal Loan
5.0
NerdWallet rating

SoFi offers online personal loans with consumer-friendly features for good- and excellent-credit borrowers.

Visit Partner
Popular lender pick
Other visitors like them, we think you will too!

Best Secured Personal Loans

Lender
NerdWallet Rating
Est. APR
Loan amount
Min. credit score
Learn more
Upgrade

Upgrade

Top 3 most visited 🏆
Visit Lender
on Upgrade's website
on Upgrade's website
Check Rate
on NerdWallet
on NerdWallet
Best for Secured loans from online lenders
Rate discount

8.49-35.99%

$1,000-$50,000

560

Navy Federal Credit Union Personal Loan

Navy Federal Credit Union Personal Loan

Check Rate
on NerdWallet
on NerdWallet
5.0
/5
Best for Secured loans from credit unions

7.49-18.00%

$250-$50,000

None

BestEgg

Best Egg

4.5
/5
Best for Secured loans from online lenders
Secured loans
Wide range of loan amounts

8.99-35.99%

$2,000-$50,000

600

Oportun

Oportun

3.5
/5
Best for Secure loans from online lenders

29.00-35.95%

$300-$10,000

None

Explore all of our lender picks by category

Our pick for

Secured loans from online lenders

Upgrade
Visit Lender
on Upgrade's website
on Upgrade's website
Upgrade

Upgrade

Est. APR

8.49-35.99%

Loan amount

$1,000-$50,000

Min. credit score

560

BestEgg
BestEgg

Best Egg

4.5
Est. APR

8.99-35.99%

Loan amount

$2,000-$50,000

Min. credit score

600

Our pick for

Secured loans from credit unions

Navy Federal Credit Union Personal Loan
Navy Federal Credit Union Personal Loan

Navy Federal Credit Union Personal Loan

Est. APR

7.49-18.00%

Loan amount

$250-$50,000

Min. credit score

None

Our pick for

Secure loans from online lenders

Oportun
Oportun

Oportun

Est. APR

29.00-35.95%

Loan amount

$300-$10,000

Min. credit score

None

What to know about secured personal loans

A secured personal loan is a loan you get by pledging something you own, typically a vehicle or savings account, in exchange for borrowed money that you repay over time.

Secured loan amounts are typically from a few hundred dollars to $50,000 and may be tied to the value of your collateral. Annual percentage rates are from 6% to 36% and repayment terms are from one to seven years.

» MORE: Secured vs. unsecured loans: What’s the difference?

How secured loans work

To get a secured loan, your collateral must meet a lender’s requirements. For example, you usually have to own your car to get an auto-secured personal loan, and a lender may require an investment or savings account with a certain dollar value in order to accept it as collateral. Typically, the collateral’s value must be equal to or greater than the loan amount.

Like an unsecured loan, your credit, income and other debts are central to getting approved for a secured loan, but offering collateral lowers the risk to the lender. In turn, approval odds can be better for secured loans, and the rate is typically lower.

If you qualify, the lender will place a lien on your collateral, which may give them the right to take it if you fail to repay the loan.

These loans are typically repaid in equal monthly installments, and most lenders report payments to the three major credit bureaus — Equifax, Experian and TransUnion. This means if you stop making payments, you risk losing the collateral and your credit score will likely drop.

Once the loan is repaid, the lender no longer has the right to take your collateral.

Types of secured loans

Home equity loans and HELOCs: A home equity loan or line of credit is a second mortgage that lets you access cash based on the value of your home. As with the initial mortgage, a lender can take your house if you don’t repay.

Auto-secured loans: With an auto-secured loan, the lender considers information like the car’s make, model and year — in addition to your credit and finances — to decide your rate. If approved, you send the lender your title and they return it once the loan is paid off. These are different from auto title loans, which can have triple-digit APRs (more on those below).

CD loans: If you have a certificate of deposit with a bank, you may be able to use it as collateral for a personal loan. Rates are usually low on CD loans — typically starting a couple of percentage points above the CD rate — and it’s one way to access funds without withdrawing the CD early and paying a penalty.

401(k) loans: An employer-sponsored 401(k) plan may allow employees to borrow from their retirement account for up to five years. Rates are usually low on 401(k) loans, but by borrowing from the account, you’re missing out on market gains and compound interest from your retirement savings.

Pawn loans: Pawnshops let you hand over valuables in exchange for cash that you must typically pay back within a couple of weeks. Short repayment terms and APRs up to 200% may make pawn loans difficult to repay. If you fail to repay this loan, the pawnshop will keep your item.

Car title loans: These are high-interest, short-term loans of usually a few hundred or thousand dollars. Because they’re often difficult to repay on time, car title loans can encourage repeat borrowing, which can lead you into a debt cycle. Avoid auto-secured loans with rates above 36%, which is the highest rate consumer advocates say an affordable loan can have.

Pros and cons of secured loans

Weigh the benefits of getting a secured loan against the potential drawbacks before you borrow.

Pros

Cons

  • Better approval odds.

  • Lower interest rates and higher loan amounts.

  • The lender could take your collateral.

  • Not as widely available as unsecured loans.

Pros

  • Better approval odds. A lender is more likely to approve a secured loan application.

  • Lower interest rates and higher loan amounts. Because the risk of losing money is lower for the lender, you may be approved for a larger loan at a lower rate.

Cons

  • The lender could take your collateral. If your car is collateral for a loan and you need it to get to work, for example, losing it could put you in a worse situation than before you borrowed.

  • Not as widely available as unsecured loans. Many banks, credit unions and online lenders offer only unsecured loans.

Where to get a secured personal loan

Banks: Secured loans from banks are usually backed by a savings or CD account you already have with the bank. You can’t access that money until the loan is repaid.

Credit unions: Some credit unions offer share-secured loans, which is another term for savings-secured loans. The credit union will hold onto your savings while you repay the loan.

If your credit union doesn’t offer these but your credit score is somewhat low, you may still qualify for an unsecured loan, because credit unions are known to have softer borrower requirements and lower APRs.

Online lenders: Most online lenders that provide secured loans require a vehicle as collateral. Some let you apply for this loan upfront, but others may show you the option only after you’ve tried applying for an unsecured loan.

Many lenders let you check your rate on an unsecured loan without affecting your credit, so you can pre-qualify with multiple lenders to find the best rate.

How to get a secured loan

The process for getting a secured loan can vary based on the type of collateral you’re using, but here are some of the steps you’ll take:

  1. Inquire about the loan. Some lenders offer secured loans only after an applicant does not pre-qualify for an unsecured loan. If you can’t pre-qualify with the lender, or you don’t see a secured loan option, ask the lender directly about secured loans.

  2. Check your budget. Review your cash flow to find out how much you can afford to pay toward the loan each month. Use a personal loan calculator to see what APR, loan amount and repayment term you’d need to keep monthly payments affordable.

  3. Choose a lender. Compare lenders to see what kind of collateral they accept and what rates they offer.

  4. Gather documents. Before you apply, gather the documents most lenders require for an application. These can include a government-issued ID, bank statements, W-2s and pay stubs. You may also need documents for the collateral, such as a car title.

  5. Apply. Most lenders have online applications. Once you submit, an approval decision may take a couple of days or longer if a lender has to assess the collateral’s value.

Tips to apply for a secured loan with bad credit

If you have bad credit (a score of 629 or lower), here are a few tips to prepare for a secured loan application.

  • Review your credit and debts. Pull your credit reports to see what a lender will see when evaluating your application, including any delinquencies or errors, and find opportunities to build your credit before applying. You can get free credit reports through NerdWallet or at AnnualCreditReport.com.

  • Check your finances. Review your income, including any non-employment income sources the lender may accept, like alimony and child support. Then, calculate your debt-to-income ratio, which is the percent of your monthly income that goes toward debt payments. If your DTI is high, consider paying down other debts before applying.

  • Assess the value of your collateral. Check the collateral’s value to get an idea of the loan amount you may qualify for. If you’re using a bank or investment account to secure the loan, review the balance and past statements. To determine the value of your car, use a pricing guide such as Edmunds or Kelley Blue Book.

Frequently asked questions about secured loans

  • Secured loans may have looser qualification requirements than unsecured loans, meaning borrowers with fair and bad credit (scores below 690) may have a better chance of qualifying.

  • Secured loans can have lower rates than unsecured loans because the lender can take your collateral if you fail to repay, which makes it less risky for the lender. Lenders typically offer lower rates on loans that seem less risky.

  • If you miss too many secured loan payments, the lender can take your collateral, which may be the funds in a savings account or your vehicle.

  • Mortgages, car loans, 401(k) loans, pawn loans and secured personal loans are all examples of secured loans.

Alternatives to secured personal loans

Because secured loans require you to risk a car or savings account — and because they’re somewhat rare — it’s a good idea to compare other options before you borrow.

Alternatives for bad credit

Bad-credit unsecured loans: Before you pledge collateral on a secured loan, check to see if you qualify for an unsecured loan. Some online lenders tailor their personal loans to bad-credit borrowers, and let you pre-qualify with a soft credit check to preview your rate and loan amount.

Buy now, pay later: Many major retailers offer “buy now, pay later” at checkout, which lets you pay for a large purchase in smaller, often bi-weekly installments with no credit check.

Family loan: A trusted friend or family member may lend you necessary funds and charge little or no interest, if you’re comfortable asking.

Other ways to make money: A side gig could provide a one-time cash influx or a steady supplement to any other full- or part-time work.

Alternatives that build credit

Secured credit card: With a secured card, you put down a deposit for the lender to hold while you make purchases and pay them off. In exchange the lender reports the payments to the credit bureaus, helping to build your score.

Credit-builder loan: A credit-builder loan is a tool that helps borrowers build credit history but doesn’t provide any short-term cash. With this type of loan, the lender holds the loan amount in a bank account while you make payments. The lender reports your payments to the credit bureaus, and once you’ve repaid the full loan amount, the funds are released to you.

Emergency alternatives

Local financial assistance programs: A local church or community organization may provide free food, help with rent and utility bills or transportation to job interviews. NerdWallet maintains a database of local resources that may help.

Medical bill assistance: For help with medical bills, consider asking your physician’s office to set up a no-interest payment plan, try to negotiate for a lower bill or work with a medical bill advocate.

Last updated on February 16, 2024

Methodology

NerdWallet’s review process evaluates and rates personal loan products from more than 35 technology companies and financial institutions. We collect over 50 data points from each lender and cross-check company websites, earnings reports and other public documents to confirm product details. We may also go through a lender’s pre-qualification flow and follow up with company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.

Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. Our ratings award fewer points to lenders with practices that may make a loan difficult to repay on time, such as charging high annual percentage rates (above 36%), underwriting that does not adequately assess consumers’ ability to repay and lack of credit-building help. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.

NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodologies for personal loans and our editorial guidelines.

To recap our selections...

NerdWallet's Best Secured Personal Loans of 2024

  • Upgrade: Best for Secured loans from online lenders
  • Best Egg: Best for Secured loans from online lenders
  • Navy Federal Credit Union Personal Loan: Best for Secured loans from credit unions
  • Oportun: Best for Secure loans from online lenders
NerdWallet Pixel