Best Secured Loans in 2025

Secured loans require collateral, are typically easier to qualify for and could be a good choice if you have bad credit.

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Written by
Tara Mastroeni
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Written by
Carol Pope
Updated December 27, 2024

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Secured personal loan lenders at a glance

Best Egg: Best secured loans for consolidating debt

7.99% - 35.99%

36 to 84 months

$2,000 - $50,000

Home fixtures

0.99% - 9.99%

Pros
  • If you have excellent credit, Best Egg’s secured loans come with low rates, making them ideal for debt consolidation
  • Won’t risk your entire house as collateral (just permanent fixtures)
  • Don’t need to become a member like you would with a bank or credit union
Cons
  • Must make at least $100,000 a year and have a credit score of at least 700 to get lowest rates
  • Will keep at least 0.99% out of your loan as an origination fee
  • Will be hard to sell your home until your loan is repaid

What to know

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Best Egg’s Secured Loan + Homeowner Discount is a unique loan that uses your home’s fixtures as collateral. Eligible fixtures could include bathroom vanities, built-in cabinetry and other elements permanently attached to your home.

Best Egg will place a lien on your fixtures while your loan is open. In exchange, you could save an average of 20% on your annual percentage rate (APR) compared to Best Egg’s unsecured loan. However, if you sell your home before paying off your loan, your entire loan balance will be due.

How to qualify

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Best Egg uses your home’s permanent fixtures as collateral, but it doesn’t need to appraise those fixtures’ value. Instead, Best Egg will review your credit history and home equity to see if you qualify.

You must also meet the requirements below to qualify for a Best Egg loan:

  • Citizenship: Be a U.S. citizen or permanent resident living in the U.S.
  • Administrative: Have a personal checking account, email address and physical address
  • Residency: Not live in the District of Columbia, Iowa, Vermont, West Virginia or U.S. territories
  • Credit score: 580+
See Personalized Results Read Our Expert Review

Digital Federal Credit Union: Best secured loans for rebuilding credit

Starting at 3.50%

Up to 120 months

Up to your savings account balance

Savings account

None

Pros
  • Don’t need perfect credit to qualify, and on-time payments can help you improve your credit score
  • Skip-A-Payment program available in case of financial hardship
  • Live chat support available
Cons
  • Must have DCU savings account
  • Physical branches only in Massachusetts and New Hampshire (but available online in all 50 states)
  • Fee required to join a participating organization if you don’t meet other membership requirements

What to know

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If you’re working on improving your credit, a Savings-Secured Loan from Digital Federal Credit Union (DCU) might help. Since it uses your savings account as collateral, DCU is open to working with borrowers with rockier credit histories.

You can borrow up to how much you have in your DCU savings account, with a fixed APR starting at 3.50%. DCU also offers repayment terms as long as 120 months. So, not only can you borrow money cheaply, but you’ll also have a long time to pay off your loan (and have more opportunities to make on-time payments, which could help boost your score).

How to qualify

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As a credit union, you must be a DCU member to take out a loan. To join, you must:

  • Live, work, worship or go to school in certain Massachusetts communities
  • Work for a participating employer
  • Join a participating association (annual dues between $10 and $120)
  • Open a DCU savings account with a deposit of at least $5
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First Tech: Best for big secured loans

Starting at 3.00% + certificate account rate

Up to certificate maturity

$500 - $500,000

Share certificate account

None

Pros
  • Can borrow as much as you have in your share certificate account (up to $500,000)
  • Share certificate continues to earn dividends as you pay your loan
  • Highly rated mobile app
Cons
  • Must join the credit union
  • Only available if you have a share certificate account
  • Physical locations only in California, Oregon and Washington (but online banking is available nationwide)

What to know

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First Technology Federal Credit Union certificate secured loan can be a good way to invest and borrow at the same time. As you pay back your loan, the funds in your certificate account will continue to earn dividends. Although the same is true for a savings-secured loan, certificate accounts generally earn more interest.

You must have a share certificate account to get this loan, so it might not work for everyone. Share certificate accounts are a type of investment account, similar to bank certificates of deposit (CDs). It’s a lower-risk option than a lot of stocks, but you won’t be able to withdraw your investment funds from your account without a penalty for a certain period of time (called certificate maturity).

How to qualify

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To join First Tech (a requirement to get a loan), you must:

  • Work for a partnering employer
  • Be related to a current First Tech member
  • Live in Lane County, Oregon
  • Become a member of the Computer History Museum or Financial Fitness Association (First Tech will pay for your first year of membership, and you don’t have to maintain membership to keep your First Tech account)

After you become a member, you’ll need to have a share certificate account to take out a certificate secured Loan. These require a minimum opening balance of $500.

See Personalized Results

Regions Bank: Best for small secured loans

Starting at 4.00%

Varies based on loan amount

Starting at $250, minus fees

Savings account

None

Pros
  • Can borrow as little as $250
  • No upfront or administrative fees
  • Rate discounts if you sign up for autopay with a Regions checking account or if you’re an existing member
Cons
  • Only available in 15 states
  • Must borrow at least $5,000 to be eligible for the autopay discount
  • Charges a late payment fee (5.00% of the unpaid amount or $100, whatever is less)

What to know

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If you live in a state where Regions Bank is available, this bank could be a great fit if you need a small loan. Small loans can be hard to find, forcing some to borrow more (and pay more overall interest) than they really need.

Getting a small secured loan is also a popular strategy if you’re looking to build credit. But know that it will cost you in the form of interest. Regions’ secured loans can come with rates as low as 4.00%, but you have to borrow at least $3,000. From $250 to $2,999, you’re looking at 6.00% APR.

How to qualify

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To determine your eligibility, Regions will review your overall credit history as well as your income. Regions is only available to residents of Alabama, Arkansas, Florida, Georgia, Iowa, Illinois, Indiana, Kentucky, Louisiana, Missouri, Mississippi, North Carolina, South Carolina, Tennessee and Texas.

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Upgrade: Best secured loans for bad credit

7.99% - 35.99%

24 to 84 months

$1,000 - $50,000

Car less than 20 years old

1.85% - 9.99%

Pros
  • Accepts credit scores as low as 580
  • Can change your due date online, if needed
  • Don’t need to tie up money in a certificate or savings account
Cons
  • Will deduct 1.85% - 9.99% from your loan funds as an origination fee
  • Using your car as collateral can be risky
  • Car must be fully paid off before it’s eligible

What to know

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Instead of using a savings or investment account as collateral, loan platform Upgrade lets you use your car. This, combined with its lower credit score requirements, could make it a great choice if you have less-than-perfect credit. You can also add a co-borrower and get a joint loan, further increasing your approval odds.

However, Upgrade can repossess your car if you don’t keep up with your loan payments. If you lose your ride, you might have a hard time commuting to work, leading to further financial problems.

How to qualify

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To qualify for an Upgrade loan, you must meet the requirements below:

  • Age: Be at least 18 years old (19 in some states)
  • Citizenship: Be a U.S. citizen or permanent resident or live in the U.S. with a valid visa
  • Administrative: Have a valid bank account and email address
  • Credit score: 580+

To get an auto-secured loan, your car must be:

  • Less than 20 years old and have a clean (not salvage) title
  • Used for personal reasons (not business or commercial)
  • Insured
  • Registered in your name and current on taxes/registration
  • Paid off (not financed or leased)
See Personalized Results Read Our Expert Review

What is a secured loan?

Secured loans are personal loans backed (or guaranteed) by a valuable piece of property (called collateral). If you don’t pay back your loan, your lender can take (or repossess) your collateral to recoup some of its losses. Different secured loans require different types of collateral. For bank loans, collateral is often your savings account or a certificate of deposit (CD). Online lenders tend to accept property, such as your car.

Secured loans vs. unsecured loans

There are three main reasons why people choose secured loans versus unsecured loans:

→ Secured loans are typically easier to qualify for. By offering collateral, you’re taking risk away from the lender. In a lender’s eyes, you’re less likely to stop paying your loan because you don’t want to lose your collateral. Plus, if you stop paying, it can sell your collateral to offset some of its loss.

→ Secured loans also usually come with lower rates. Again, it boils down to risk. The less risky you are for a lender, the more it wants your business. In turn, the lender may offer you a low APR so you choose it over a competitor.

→ Secured loans can help you improve your score if you have bad or no credit. Some people get a smaller secured loan and make on-time payments to beef up their credit history and credit score.

On this page

How secured loans work

At their core, secured loans work similarly to any other type of installment loan, with a few distinct differences. Here’s what to expect when you apply.

  • The lender will review your collateral and credit history. The lender will usually assess the value of the asset that you’re putting up as collateral. It will also review your credit score, annual income and other credit-related factors.
  • If you qualify, the lender will approve you. Once you sign the loan agreement, the lender will place a lien on your collateral. This gives it the right to repossess your collateral if you stop making payments. After all the paperwork is in place, the lender will distribute the loan funds to you.
  • You’ll begin to make regular repayments. Installment loans are typically repaid every month, and most lenders report your payments to the credit bureaus.
  • Continue making payments until you’ve paid off your loan in full. Then, the lender will remove the lien from your collateral. After the lien has been removed, the lender no longer has the right to take that asset from you.

What can you use as collateral for a loan?

Just as there are different types of secured loans, there are also different types of assets you can use to secure your debt. Some of the most common forms of collateral are real estate, vehicles, savings accounts and CDs.

  • Real estate
  • Vehicles
  • Checking and savings accounts
  • CDs
  • Money market accounts
  • Stocks
  • Mutual funds
  • Bond investments
  • Insurance policies
  • Jewelry and expensive valuables

 Secured loans and risk
Secured loans have many benefits, but they also come with some big risks. If you can’t keep up with your loan payments, your lender has the right to repossess your collateral. Choose your collateral carefully, and make sure you can comfortably afford your payments before applying for a secured loan.

Types of secured personal loans

Secured loans aren’t as common as unsecured loans, but you may find them by contacting banks, credit unions and online lenders. Each lender will have its unique collateral requirements, but here are a few common types:

  • Savings-secured loan: A savings-secured loan uses a savings account as collateral. Your maximum loan amount is usually the same amount of money you have in your account.
  • Certificate of deposit (CD) loan: This type of loan uses an existing certificate of deposit as collateral. Your CD must be matured, otherwise you’ll face an early withdrawal penalty and instead of earning interest, you’ll owe interest on the amount you borrow.
  • Auto-secured loan: An auto-secured loan uses your car as collateral. In this instance, you transfer your car’s title to the lender, and the lender transfers it back to you once you’ve repaid the loan in full. This isn’t the same as a car title loan (more on that below).
  • 401(k) loan: Although not technically a personal loan, you may be able to take out a 401(k) loan if you have an employer-sponsored 401(k) plan. A big benefit here is that the interest you pay goes back into your 401(k). But if you leave your job before you’ve paid off your loan, your remaining balance might be due immediately (or you’ll face an early withdrawal penalty).
  • Home equity loan or HELOC: Home equity loans and HELOCs use the equity you’ve built up in your home as collateral. These loans also aren’t personal loans, but they tend to offer large loan amounts at affordable interest rates. However, if you’re unable to repay the loan, the lender can seize your home.

 Beware: Secured loans and predatory lending
Not all secured loans are created equal. Some secured loans, especially those that target bad credit borrowers, could fall under predatory lending.

Title loans: In exchange for a loan, you’ll give your car title to the lender. If you don’t pay your loan back, it can repossess your vehicle. Although this doesn’t sound too different from a regular auto-backed loan, title loans come with excessively high APRs and short loan terms (around 30 days).

Pawn shop loans: Here, the pawn shop will give you a loan based on the value of your item (but much less than what it’s worth). You’ll have 30 to 60 days to pay back what you borrowed, plus fees. Otherwise, the pawn shop can sell your collateral.

Secured loans pros and cons

A secured loan may not be the best option for everyone. Not keeping up with your payments can tank your credit score, and to make things worse, you’ll lose your collateral.

ProsCons
 Low rates. Secured loans typically have lower interest rates than unsecured loans.

 Looser requirements. Because secured loans are generally easier to qualify for, they could be a good option if you have fair or bad credit.

 Predictable billing. Unlike a credit card, your secured loan bill will be the same each month. 		 Can be risky. You’ll lose your collateral if you don’t pay.

 Not as common. You might have a hard time finding a bank, credit union or online lender that offers secured loans.

 Might need to have an established savings or CD account. You can’t borrow against money you don’t already have.

 Possible fees. Some personal loans (especially online loans) come with an origination fee. This is a portion of your loan that the lender will keep for itself before sending you your funds.

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Applying for secured loans with bad credit

If you have rocky credit, you may want to improve your score before applying to make it more likely the lender will approve you. Here are some tips to make it happen.

  • Check your credit scores and reports: Watching your credit score go up can motivate you to stay the course. Check your credit score for free with LendingTree Spring. Also, check your credit report and dispute errors you find. You can get one free copy of your reports each week from AnnualCreditReport.com.
  • Lower your debt-to-income ratio: Your debt-to-income (DTI) ratio measures how much of your monthly income goes toward paying down what you already owe. If your DTI ratio is above 35%, consider paying down your current debts before applying for another loan.
  • Make future payments on time: Payment history accounts for 35% of your overall FICO score. By making future payments on time, you’ll help grow your score.
  • Assess the value of your collateral: How much your collateral is worth often dictates how much you can borrow. Appraising your collateral before applying can help you get a better idea of how big of a loan you might qualify for.

Alternatives to secured personal loans

Taking a one-size-fits-all approach to any financial product can be a surefire way to find yourself worse off. Here are some alternatives to secured loans that may better suit your needs.

 If you need money now

  • Joint loan: A joint loan is a personal loan that you share with another person. Joining forces with someone who has good credit can help you get approved if you don’t qualify for a loan by yourself. However, late payments will impact both of your credit scores.
  • Buy now, pay later (BNPL): BNPL apps let you split up retail purchases into payments. The most common plan is Pay in Four. You’ll pay 25% down and pay off your remaining balance over four installments due every two weeks. Beware — because BNPL apps are easy to use, you might end up overspending.

 If you need to establish or improve your credit

  • Secured credit card: A secured credit card works like a regular credit card, except that you’ll make a cash deposit. This serves as your credit limit. You can borrow against it as needed, up to that deposit amount. After responsible use, the credit card company might give you your deposit back and offer you a traditional card.
  • Credit-builder loan: You don’t actually borrow money with a credit-builder loan. Instead, you’ll give the lender a lump sum of money. Then, you’ll make monthly payments to unlock those funds. The lender will report your monthly payments to the credit bureaus, helping you establish credit history.

How we chose the best secured personal loans

We reviewed more than 10 lenders to determine the overall best five secured personal loans. To make our list, lenders must offer secured loans with competitive APRs. From there, we prioritize lenders based on the following factors:

  • Accessibility: Lenders are ranked higher if their personal loans are available to more people and require fewer conditions. This may include lower credit requirements, wider geographic availability, faster funding and easier and more transparent prequalification and application processes.
  • Rates and terms: We prioritize lenders with more competitive fixed rates, fewer fees and greater options for repayment terms, loan amounts and APR discounts.
  • Repayment experience: For starters, we consider each lender’s reputation and business practices. We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide any unique perks to customers, like free wealth coaching.

According to our systematic rating and review process, the best secured personal loans come from Best Egg, Digital Federal Credit Union, First Technology Credit Union, Regions Bank and Upgrade.

Frequently asked questions

Maybe, but it depends on whether you’re confident you can keep up with your loan and what interest rate you can get.
 
Secured loans are easier to qualify for, but you’ll lose your collateral if you don’t pay. At the same time, secured loans also typically have lower rates than unsecured loans, so offering collateral could help you better afford a loan.

It’s usually easier to get a secured loan than it is an unsecured loan. Even so, offering collateral doesn’t mean a lender will automatically approve you. Along with the value of your collateral, the lender will review your credit score and history. If you don’t meet the lender’s credit requirements, it will turn you down.

The credit score needed for a personal loan varies by lender (which is why it’s so important to shop). Upgrade offers auto-secured loans to borrowers with credit scores 580 and higher. But the lower your score, the higher your rate. Generally, you’ll need at least good credit (670+) before rates start to become more affordable.