Best secured personal loans of 2023
Find Personal Loans near you
Secured personal loans are loans that are backed by collateral. This means you’ll need to offer your lender an asset to secure the loan, like money deposited in a bank account, a vehicle or your house. The lender can seize the collateral if you don’t repay the loan as agreed.
For that reason, secured personal loans are often easier to get than unsecured loans, and their rates are typically better as well. Just like with an unsecured loan, you’ll repay the loan via fixed installments.
To make our top choices, our research team evaluated 31 personal loan lenders and narrowed them down to those that offer secured loans. We selected five lenders based on factors that are important to borrowers, including minimum required credit scores, repayment terms, maximum loan amounts, annual percentage rates (APRs) and fees.
Our picks may be Authorized Partners that compensate us. This does not affect our recommendations or evaluations but may affect the order in which companies appear.
|# of reviews||3,146||0||743||665||1,974|
|Loan amounts||$1,500 to $20,000||$20,000 - $400,000||$250 - $50,000||$1,000 to $50,000||$2,000 to $50,000|
|Term lengths||24 to 60 months||5, 10, 15 or 30 years||Up to 60 months||24 to 84 months||36 to 60 months|
|Minimum credit score||Varies||640 or 680||Undisclosed||560||600|
|Read Reviews||Read Reviews||Read Reviews||Read Reviews||Read Reviews|
Compare our top 5 secured personal loans picks
- CA Rating:3.6
- Loan amounts: $1,500 to $20,000
- Term lengths: 24 to 60 months
- Minimum credit score: Varies
OneMain Financial is a publicly traded finance company with about 1,400 branches in 44 states (all but Alaska, Arkansas, Connecticut, Massachusetts, Rhode Island and Vermont). You can apply for secured personal loans of $1,500 to $20,000 online or at a branch, and collateral can include cars, recreational vehicles (RVs), boats, motorcycles and more. You can usually be approved for a secured loan on the same day that you apply.
Even people with less-than-perfect credit may qualify for financing with OneMain, as it also considers your collateral, income and existing debt levels when evaluating your application. In fact, most of its borrowers are considered nonprime, meaning they have credit issues that might make it difficult to get approved for personal loans with many other lenders.
You can make loan payments online, with OneMain’s mobile app, by phone, in a branch or via mail. Plus, its free PayNearMe service allows you to make cash payments at participating retailers, including some CVS, 7-Eleven, Walmart and Family Dollar locations.
Though you must make loan payments at least monthly, you can pay as frequently as you want. You can also sign up for Direct Pay if you would prefer to have your payments made automatically. Keep in mind: OneMain’s rates are relatively high, ranging from 18% to 35.99% APR (as of publication). If you have good credit, you may be able to get better rates elsewhere.
- What we like
- OneMain has a number of benefits to offer nonprime borrowers, including:
- Approval is based on more than just your credit score.
- Loan specialists will help you build a monthly budget and work to improve your credit.
- Payments can be made online, via mobile app, in branches or at participating retailers.
- What to consider
- OneMain won’t be the right lender for everyone, given that:
- It doesn’t have branches in every state.
- Its APRs are on the high side.
- Its maximum loan amount is low.
- What reviewers say
- Several ConsumerAffairs readers praised the professionalism and support of OneMain’s customer service team. Others mentioned how much they appreciate OneMain’s simple payment system.
Nancy from Spring City, Tennessee, said: “OneMain Financial representatives truly care about you as an individual, are empathetic to your needs and go out of their way to help. They are a reputable company and very easy to do business with. Payments are easy to set up online. I highly recommend OneMain Financial for your personal loan needs.”
However, other readers warned that you might pay a high rate with OneMain if you have a low credit score.
- CA Rating:3.8
- Loan amounts: $20,000 - $400,000
- Term lengths: 5, 10, 15 or 30 years
- Minimum credit score: 640 or 680
Figure is a fintech company founded in 2018. It’s different from the other lenders on our list in that it offers home equity lines of credit (HELOCs) rather than standard secured loans.
With a Figure HELOC, you can borrow as much as $400,000 over a term as long as 30 years and repay your loan early with no penalty. APRs range from 6.1% to 14.74% (as of publication). With many HELOCs, it can take a couple of weeks or even months to get approved and funded. But if you choose to apply online for a HELOC with Figure, you may get approved within five minutes and funded in as few as five days. Since your home is offered as collateral, the maximum loan amount is much higher than the other loans on our list.
Unlike other HELOCs that require in-person home appraisals, Figure’s valuation process is completed entirely online. To qualify, you’ll need a credit score of at least 640 (or 680 for investment properties) and income sufficient to repay your maximum withdrawal amount. For perspective, many lenders consider a debt-to-income (DTI) ratio of 36% to 43% acceptable for a HELOC applicant. You’ll also need equity in your home (many lenders want at least 15% to 20%).
Figure’s HELOCs are a bit different than standard HELOCs, in that borrowers are required to draw 100% of their approved credit limit (minus the origination fee) when they close on the HELOC. But like other HELOCs, borrowers can redraw throughout the draw period, provided they’ve made repayments.
Figure offers HELOCs in 43 states and Washington, D.C. Its HELOCs are currently not available in Delaware, Hawaii, Kentucky, Maryland, New York, Texas or West Virginia.
- What we like
- Figure can be a great lending solution for borrowers looking for:
- High maximum loan amounts and funding in as few as five days
- A lender that doesn’t have high credit score requirements
- Low APRs
- A 0.25% APR discount if you sign up for autopay
- What to consider
- Figure is not a good lender for you if you’re put off by:
- An origination fee of up to 4.99%
- The idea of putting up your home as collateral
- A 100% initial draw
- What reviewers say
- There are no ConsumerAffairs reviews for Figure as of publication.
- CA Rating:4.8
- Loan amounts: $1,000 to $50,000
- Term lengths: 24 to 84 months
- Minimum credit score: 560
Upgrade is a fintech company that provides affordable access to personal loans and other financial products via partnerships with banks and other financial institutions. The company is licensed in 30 states. It offers unsecured and secured personal loans up to $50,000 with 24- to 84-month terms. Your car will be used as collateral for a secured loan. APRs range from 8.49% to 35.99% (as of publication).
It only takes minutes to see if you qualify for a personal loan from Upgrade. The company uses a soft credit check to pre-qualify you, so there’s no impact on your credit score if you just want to check your rate and approval prospects. This is a particularly helpful feature for those with bad credit. A hard credit check will only be performed once your loan is funded.
You can expect to receive loan proceeds (less an origination fee of 1.85% to 9.99%) within about a day after Upgrade approves your application and verifies any required documents. Funds from an Upgrade loan can generally be used at your discretion, but they cannot be used for post-secondary schooling costs or investments.
If you want to pay the loan back early, you can do so at any time without paying a fee.
- What we like
- Upgrade’s secured loans have several attractive features, such as:
- You can see if you qualify with no credit score impact.
- There are no prepayment penalties.
- You can choose from a wide range of loan amounts and terms.
- What to consider
- Some of the less attractive aspects of Upgrade’s secured loans are:
- You’ll need to pledge a car as collateral.
- Origination fees can potentially be quite high.
- Loan funds cannot be used as investments or to pay for post-secondary education.
- Loans are only available in 30 states.
- What reviewers say
- While some ConsumerAffairs readers complained that Upgrade’s loan fees were too high, others found their borrowing experience with Upgrade to be worthwhile overall.
Ann from Roseville, Michigan, said: “I know some people were upset with the one-time fee, but it was worth it to me to get out of a jam. I also like how you can borrow only what you need and not forced to borrow a huge amount.”
Richmond from Lakewood, California, said he likes the financial flexibility offered by Upgrade and has used the lender twice. He further noted that “this company made it simple for me with a clear monthly payment plan.”
- CA Rating:4.8
- Loan amounts: $2,000 to $50,000
- Term lengths: 36 to 60 months
- Minimum credit score: 600
Best Egg is a fintech company that partners with banks and other financial institutions to offer personal loans in all but three states (Iowa, Vermont and West Virginia) and Washington, D.C. You can get secured or unsecured personal loans up to $50,000 with terms up to 84 months. Your home’s fixtures — such as built-in cabinets, bathroom vanities and lighting fixtures — are used as collateral for a Best Egg secured loan. APRs on secured loans range from 5.99% to 29.99% (as of publication).
You can pre-qualify online with no impact on your credit (a soft credit check is used) and receive an offer in minutes. The company uses multiple factors to determine your rate, such as your credit score, income and existing debt. Its lowest rates are reserved for individuals with a FICO score of at least 700 and at least $100,000 in annual income.
After accepting a loan offer, you may need to provide additional documentation, such as pay stubs, to verify your application. Once the verification is complete, loan proceeds will be sent to your bank account in about one to three days, less an origination fee of up to 8.99%. You can also use Best Egg’s Direct Pay feature to pay off your credit cards directly and quickly with your loan funds.
You can use your Best Egg personal loan for most purposes, except for things like investing or paying for post-secondary education. You can also get more than one personal loan from Best Egg, as long as your total Best Egg loan balances don’t exceed $100,000.
You can pay off a Best Egg loan as quickly as you want, as there is no prepayment penalty.
- What we like
- Best Egg’s secured loans can be a great way to consolidate debt because:
- Loan proceeds can be sent directly to your credit card issuers.
- You can get more than one personal loan.
- Approved borrowers will likely receive funding in as few as one to three days.
- Your home’s fixtures serve as your collateral, not the home itself.
- What to consider
- Not every borrower is a good fit for Best Egg’s secured loans, given that:
- A potentially costly origination fee applies.
- Secured loans are not available to residents of Washington, D.C., Iowa, Vermont, West Virginia or the U.S. territories.
- The lowest APRs are reserved for borrowers with a FICO score of at least 700 and an individual annual income of $100,000 or more.
- What reviewers say
- Many ConsumerAffairs readers said the process of getting a loan from Best Egg was easy and that its customer service was supportive and helpful. While Victor from Salinas, California, indicated that he had a problem setting up his account after his loan was funded, he said a customer service rep helped him work through the technical issue and “was very nice.”
Some of the critical reviews expressed concern over the cost of Best Egg’s loans. But a few readers acknowledged that all lenders’ rates have increased recently, not just Best Egg’s. Gregory in Clackamas, Oregon, said applying with Best Egg was “fast and easy. The terms were alright, though the percentage rate could have been lower. But the rates are all up in the last eight months.”
What is a secured personal loan?
A secured personal loan is a type of installment loan that’s backed by collateral, such as a car, house or money held in a bank account. It works just like an unsecured personal loan, but if you don’t repay the loan as agreed, the creditor can take the collateral that secures the loan to repay some or all of what you owe.
You can use secured personal loans for nearly any purpose, like consolidating high-interest debt, repairing or improving your home, paying household or medical bills or covering large expenditures such as weddings. Some lenders let you use secured loan funds for any purpose; others restrict you from using the funds for things like paying for higher education or investing.
Just like unsecured personal loans, you’ll typically repay a secured personal loan in equal installments of principal and interest. The interest rate is commonly fixed for the entire loan term, but some lenders also offer variable rates.
Depending on your lender, you may be able to repay the loan as quickly as you want with no fee. However, some lenders will charge a prepayment penalty if you pay the loan back in full before the scheduled end of its term. No matter what type of loan you choose, carefully read the loan documents so you understand the terms before you go through with it.
Examples of secured personal loans
Secured personal loans primarily vary by the type of collateral you’re pledging to your lender. Collateral with a longer lifespan will typically have a longer maximum repayment term than collateral with a shorter lifespan (e.g., houses versus cars). For this reason, secured personal loans are usually distinguished by the type of collateral that secures them.
Some common examples of secured personal loans include:
- CD-secured loan
- This type of secured personal loan is backed by cash you hold in a certificate of deposit (CD) account. The loan rate is typically set at a percentage above the CD rate, and the loan’s term typically matches the CD’s maturity date. You’ll repay the loan in fixed installments during the loan’s term.
- Auto-secured loan
- If you can’t qualify for an unsecured personal loan or you want to get a better interest rate, you may be able to pledge your automobile as collateral. With this loan, the lender can take your car if you don’t pay as agreed.
- Home equity loan
- A home equity loan allows you to borrow against your home’s equity in one lump sum. Your home serves as collateral, and you usually repay a home equity loan in equal installments over time.
- Home equity line of credit
- A HELOC also allows you to borrow against the equity you’ve built up in your home. During the HELOC’s draw period, you can borrow and repay the funds as much as you want. At the end of the draw period, you’ll typically repay the balance in installments over 10 to 20 years.
When considering a secured loan, it’s important for consumers “to understand they are pledging collateral as a security interest and risk losing the asset should they default on the loan,” warned Josh Miller, the head of consumer acquisition, marketing and product development for KeyBank.
Even so, since secured personal loans are backed by collateral, they typically have better rates, and the qualification requirements are easier to meet than the requirements for unsecured personal loans, adds Miller. They can be good for people with “blemishes on their credit” or who are simply trying to build their credit.
Keep in mind: You must have collateral to use secured personal loans, like cash in a bank account, a car you own or equity in your home. If you don’t have assets to offer as collateral, secured personal loans won’t work for you.
Secured loans to avoid
While secured loans can be a good alternative to other types of financing, they’re not always the best option. You should avoid secured loans that offer very short repayment terms (e.g., measured in days versus months or years) and carry very high interest rates, such as vehicle title loans. When interest rates and fees are really high, it’s easy to get stuck in a cycle of borrowing that’s difficult to escape.
If you’re strapped for cash and need quick funding, it might be tempting to look to secured options like title loans or even pawn shops. However, think carefully before pursuing these arrangements, as you will certainly lose your collateral if you don’t repay the loan as agreed.
» MORE: 11 payday loan alternatives
Pros and cons of secured personal loans
If you’re debating between getting a secured personal loan and an unsecured personal loan, there are several pros and cons to consider.
- Qualification standards are easier for secured loans.
- Secured loans have lower APRs.
- Secured loans may have longer repayment terms.
- You must have assets to pledge as collateral for a secured loan.
- Funding may take longer to receive than with an unsecured loan.
- With a secured loan, you risk losing your collateral if you don’t repay the loan as agreed.
If you don’t want to use collateral to get a loan or you only need money for a short period of time, an unsecured loan might be better than a secured loan, explains Brian Samelko, a senior product manager at PNC Bank.
With an unsecured loan, a lender doesn’t have to protect its security interest in your assets, so unsecured loans “typically have faster approval times and less required paperwork than secured loans,” said Samelko.
» MORE: Secured vs. unsecured loans
How to choose a secured personal loan
Some factors to consider when shopping for the best secured loan are:
- Accepted collateral: Common examples of collateral that a lender might accept include money in CDs or savings accounts, your home’s equity or even your car.
- Loan amount: You may be able to borrow much more with a secured loan than an unsecured loan since you’re pledging collateral, but this depends on the collateral you have to offer.
- Fees: For a secured loan, a lender might charge application, origination, prepayment and appraisal fees.
- APR: A loan’s APR includes both interest and fees, so it’s very useful for comparing loan offers between lenders.
- Terms: Your repayment term often depends on the type of collateral you offer, as the term is connected to the asset’s lifespan. For example, a CD-secured loan will often have a term that matches when the CD matures. Conversely, you may get a 60-month term if you pledge your car as collateral or up to 30 years if you pledge your home.
- Funding speed: While unsecured loans are often funded much faster than secured loans, some secured lenders also offer very fast funding.
Carefully compare offers between lenders and pay attention to the fine print. Remember that even if the interest rate is lower, your total borrowing costs might be higher depending on the fees you’re charged and the repayment term length.
While longer repayment terms may result in a lower monthly payment, you’ll pay more interest over the life of the loan. You can reduce your total borrowing costs by choosing the shortest term you can afford.
Secured personal loan alternatives
If a secured loan isn’t right for your needs, some alternatives include:
- Unsecured loans: These are often faster to get than secured loans but harder to qualify for. And unsecured loan rates are usually higher. However, some lenders allow a co-signer, which may result in better rates.
- Credit cards: If you can’t qualify for an unsecured credit card, there are secured options. With a secured credit card, you’ll usually pledge cash as collateral. This can be a great way to build credit.
- Personal lines of credit: These work similarly to credit cards, except you may not be able to access the money at a point-of-sale location. Rather, you’ll usually request a draw from your line of credit, and the cash will be deposited into your bank account. Personal lines of credit can be secured or unsecured.
When thinking about the type of financing that’s right for you, consider how you plan to use the funds and how quickly you can pay the money back.
Installment loans are best if you want to borrow a single lump sum and fully repay the money in equal payments over time. Credit cards and lines of credit are better if you want to borrow and repay the money multiple times.
Whatever you choose, make sure you put together a plan for how you’ll pay off the money you borrow. With a credit card or line of credit, interest costs can quickly add up if you aren’t disciplined about making payments above the minimum and repaying your total balance quickly. Personal loans often offer lower interest rates than credit cards, and their predictable payment schedules may allow you to pay less overall.
Does a secured loan hurt your credit?
Secured loans can both help and hurt your credit. Most lenders will do a hard credit check before your loan is finalized, which may result in a temporary decrease in your credit score. However, the loan may help gradually improve your credit score if you make on-time payments.
Are secured loans easier to get?
Secured loans are often easier to qualify for than unsecured personal loans. That’s because the lender can use pledged assets as collateral to repay some or all of the money you borrowed if you default on a secured loan.
How long does it take to get approved for a secured loan?
The time it takes to get approved for a secured loan depends on the lender you select. Many lenders will preapprove you in minutes based on a preliminary review of your credit, income and collateral details. Final approval may take hours, days or months, depending on the type of collateral you pledge. For example, you may get same-day approval for a CD-secured loan, whereas it might take several weeks to get final approval for a loan secured by your home.
What credit score is needed for a secured personal loan?
There’s no universally applicable minimum credit score for a secured personal loan. However, lenders that offer secured loans to borrowers with bad or fair credit may require credit scores of 560 to 660 or better, whereas lenders that prefer borrowers with good credit may require credit scores of at least 670 or so.
Some lenders don’t set a minimum credit score requirement and instead evaluate your loan application based on factors like your credit history, your level of existing debt and your income.
Can you pay off a secured loan early?
You can usually pay off a secured loan early, but you might have to pay a fee to do so. Also, if your lender uses precomputed interest rather than simple interest, you’ll be required to pay the total interest you would have owed if you kept the loan for its entire term, even if you pay it off early.
Where can I get a secured personal loan?
You can get secured personal loans from banks, credit unions and online lenders. Some lenders allow you to specifically apply for a secured personal loan. Others have a general personal loan application and will offer you a secured or unsecured option based on your qualifications or needs.
To make our top picks for our list of the best secured personal loans, we collected 24 individual data points from 31 well-known lenders. We then compared them based on various loan features, including:
- Repayment terms: We looked at the loan repayment options, giving preference to those lenders that offer a broader range of terms.
- APRs: We gave more consideration to lenders that offer loans with lower starting APRs.
- Loan amounts: Similar to repayment terms, we favored lenders that offer a wide range of loan amounts.
- Minimum credit scores: Preference was given to lenders that work with borrowers with low credit scores, as well as lenders that evaluate loan applications based on a wide range of factors and not just credit scores.
- Fees: We considered loan fees such as origination, late payment and prepayment fees and gave greater consideration to lenders that charge relatively few fees.
The amount of time it takes for a lender to disburse funds and a lender’s permitted uses of its loan funds were also considered in our evaluations. But the lenders we researched were comparable across the board on those features, so these were not deciding factors for our picks.
Since customer feedback is a critical indicator when evaluating companies, this was an important consideration when selecting our top picks. However, for those companies on our list with no ratings on ConsumerAffairs, there were other variables that made them stand out as good options for debt relief, and we factored those into our decisions.
- Guide sources
- ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work.
- Federal Reserve, "Consumer Credit - G.19." Accessed May 10, 2023.
- Consumer Financial Protection Bureau, "What's the difference between a simple interest rate and precomputed interest in an auto loan contract?" Accessed May 10, 2023.
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