Best Secured Personal Loans – Guaranteed Funds
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A personal loan can be an essential tool in your personal finance toolbox, but finding what fits your needs can be intimidating, tedious, and downright difficult. A secured loan means that a type of collateral backs the loan. If you default on this type of loan, there will be something of comparable value that the lender can repossess. This added level of safety for the lender allows them to give lower interest rates, higher dollar loans, and better monthly payments, depending on factors like your creditworthiness.
In this article
Overview of the best secured personal loans
- Best for bad credit: OneMain Financial
- Best for low APR: Best Egg
- Best for no origination fees: First Tech Federal Credit Union
- Best for online lending: Upgrade
- Best for long-term loans: Navy Federal Credit Union
Compare the best secured personal loans
Financial company | What they offer | Loan amount | Annual Percentage Rates |
No minimum credit requirement, very high APR, multiple processing fees, vehicle required as collateral | $1,500 to $20,000 | 18.00-35.99% | |
Online application, good credit required, low APR, flexible repayment | $2,000 to $50,000 | 7.99% - 35.99% | |
Very low interest rates, no fees, use (specific) business stock as collateral, very high loan amounts, offers a payment protection plan | $25,000 and $1,000,000 | 3.00% | |
Online application, moderate credit necessary, no prepayment penalties, may use a vehicle as collateral | $1,000 to $50,000 | 9.99% - 35.99% | |
Long-term loans, low interest rates, use savings as collateral, no minimum credit score | $250 to $50,000 | Share rate + 2 to 3% |
Use Quicken Loans to Get a Personal Loan
- If you're tight on cash right now, you may want to consider getting a personal loan. A personal loan is a loan that you can use for just about any purpose like: paying off other debt, renovating your home, or family needs like a wedding or adoption.
- TrustPilot Rating 4.6 out of 5
- Connect with lenders for $0
- 100% online experience.
Best for bad credit: OneMain Financial
Pros & cons
Pros
- Open for borrowers with poor credit.
- Motor vehicle can be used as a collateral for any loan.
Cons
- Charges several fees.
- Maximum loan amount of $20,000.
Loan amount: $1,500 to $20,000
APR: 18% to 35.99%
Some of us have never had the opportunity to build excellent credit. Or maybe we had it once, and our financial life broke down. No matter your reason for poor credit, you can still take a secured personal loan instead of living on paycheck advances or turning to payday lenders. That’s where OneMain Financial comes in.
OneMain Financial does not require a minimum credit score for prequalification, and they’re ready to work with you no matter how low your score is. Their loans have high interest rates (18.00-35.99% APR) because of this, and they will charge fees such as an origination fee, a late fee, or an insufficient funds fee. Their loans range from $1,500 to a maximum loan of $20,000.
Another unique aspect of OneMain Financial’s loans is that they can use your motor vehicle for collateral, even if it isn’t an auto loan. Remember that the vehicle would have a lien until your loan is paid off (i.e., it could be repossessed if you miss a payment).
Visit OneMain Financial
Best for low APR: Best Egg
Pros & cons
Pros
- No prepayment penalty.
- Offers a credit card with no annual fee.
Cons
- Requires high credit score.
- Origination fees.
- No co-signer allowed.
Loan amount: $2,000 to $50,000
APR: 7.99% to 35.99%
For homeowners who are comfortable applying and receiving loan funds from online lenders, Best Egg has some of the lowest APR in the industry for secured personal loans. They offer loan options for debt consolidation, moving, weddings, home equity loans, and more.
Their online application process is simple and fast; qualifying can be done over the computer. They also offer financial education, multiple customer contact channels, and extended hours.
Their loan offers range from $2,000 to $50,000, with loan rates of 7.99% to 35.99%. Their repayment terms are flexible, allowing two changes to the payment due date and a loan term of three to five years.
Perhaps best of all, the Best Egg representative confirmed that a bad credit score alone (e.g., a credit score of 300) would not disqualify you from a loan. That’s because they also consider payment history, credit history, income, and debt-to-income ratio when considering a loan applicant’s eligibility. Best Egg loans are unavailable in Iowa, Vermont, Washington, D.C., West Virginia, or U.S. Territories.
Visit Best Egg
Or read Joywallet's review of Best Egg.
Best for no origination fees: First Tech Federal Credit Union
Pros & cons
Pros
- Loan payment protection plan available at a cost.
- Low interest rates.
- High loan amount.
Cons
Only available to those working with partner companies.
Loan amount: $25,000 and $1,000,000
APR: Starts at 3%
To qualify for a loan with First Tech Federal Credit Union, you must work in one of the companies on their partner list, which is long. It includes large companies such as Adobe, Google, and MSNBC, as well as the State of Oregon and hundreds of smaller companies. But even if your company isn’t on this list, they recommend calling to see if something can be worked out.
First Tech Federal Credit Union offers several excellent pieces to their loans. They have low interest rates, no common fees, and high loan amounts. With the right loan, you could find APR as low as a 3.00% fixed rate for a loan as high as $500,000 (or 4.5% for $1,000,000). They can offer such low rates for such high dollar amounts because the collateral they use to insure the loan is your stocks, savings account, or existing First Tech Share Certificate.
Another exciting piece they have to offer is a loan payment protection plan that is available for an extra charge. With this plan, if you are unable to make your payments because of death, disability, or involuntary unemployment, the loan payments or full amount may be canceled.
Best for online lending: Upgrade
Pros & cons
Pros
- Quick approval.
- No prepayment penalties.
Cons
- Origination fees.
- Requires a fair credit score.
Loan amount: $1,000 to $50,000
APR: 9.99% to 35.99%
Upgrade may be best for you if an online application process is your first choice. Upgrade makes the online lending process simple and smooth because they are entirely online. You can apply for the prequalification process without affecting your credit report.
When Upgrade does its credit check, it will check that your credit score is at least 560, according to the credit bureaus. Your creditworthiness is important because Upgrade offers low and high interest rates, ranging from 9.99% to 35.99%.
Like a couple of lenders on this list, Upgrade is willing to use your vehicle as collateral if you can’t prequalify using something else. This can be helpful when you are in a tight situation.
They also do not charge prepayment penalties, allowing you to pay off your loan earlier than the loan agreement. You can set up your account on autopay, paying the minimum amount and then adding to the payment whenever the money becomes available.
Visit Upgrade
Or read Joywallet's review of Upgrade.
Best for long-term loans: Navy Federal Credit Union
Pros & cons
Pros
- Low interest rate.
- Wide range of loan amount.
Cons
- Available only for military members and their families.
Loan amount: $250 to $50,000
APR: Share rate plus 2 to 3%
If you have a connection to the armed forces, Navy Federal Credit Union offers some solid financial products. There are savings and certificates of deposit-secured loans with terms of up to 60 months. These loans use savings or certificates as collateral, allowing the accounts to earn interest while sitting.
You can borrow up to 100% of the certificate’s value, with a minimum loan amount of $1,000. The APR ranges fare the share rate plus 2 to 3%, and there is no minimum credit score for qualification.
Navy Federal Credit Union will only offer a line of credit to someone who has a family or household member with ties to the armed forces (U.S. Army, Marine Corps, Navy, Air Force, Coast Guard, or Space Force), the Department of Defense, National Guard, or who is a veteran.
Or read Joywallet's review of Navy Federal Credit Union.
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Tips to choose a secured loan lender
When choosing a personal loan lender, start by checking your credit score, as it affects the interest rates and loan terms you'll qualify for. Compare offers from multiple lenders, focusing on the APR (Annual Percentage Rate) rather than just the interest rate, since APR includes any fees associated with the loan. Consider additional fees like origination, late payment, or prepayment penalties, which can significantly impact the total cost. Also, evaluate the lender's reputation by reading customer reviews and checking their customer service quality. Lastly, ensure the loan terms, such as repayment period and flexibility, align with your financial needs.
Why you should (or shouldn’t) use secured personal loans
Secured personal loans aren’t perfect, but they are incredibly useful. Like any other loan, they come with benefits and risks. The biggest benefits of these loans are that you can access large amounts of money quickly and safely and be left with a low APR loan that can be repaid in installments over a long period of time.
The biggest risk to taking a secured loan is what you are securing. Yes, if you don’t pay, it will damage your credit. But if you used your house, savings, or vehicle as collateral and you don’t pay, the item you used as collateral will be taken by your lender.
FAQs
What is the difference between a secured and unsecured loan?
A secured personal loan is backed by collateral. If you default, there will be something of comparable value that can be repossessed by the lender. A mortgage, a home equity line of credit, or a vehicle loan are examples. An unsecured personal loan means there is no collateral. If the borrower defaults, there is nothing to repossess. That’s why unsecured personal loans, like credit cards, often have higher interest rates than secured loans.
What are some benefits of secured loans?
Secured personal loans give the lender more flexibility in what they are able to safely offer. This means lower interest rates, longer payment terms, and higher loan amounts. All of this can also help you build your credit score.
Can a secured loan be written off?
It is unlikely a lender will write off a secured loan. Instead, because the loan is tied to an asset, the asset will most likely be repossessed.
Use Quicken Loans to Get a Personal Loan
- If you're tight on cash right now, you may want to consider getting a personal loan. A personal loan is a loan that you can use for just about any purpose like: paying off other debt, renovating your home, or family needs like a wedding or adoption.
- TrustPilot Rating 4.6 out of 5
- Connect with lenders for $0
- 100% online experience.
The bottom line
A secured personal loan is a tool like most other financial tools, but it is a very powerful one. When managed correctly, you can move from the financial edge to financial safety. It can accomplish goals that would be otherwise unattainable in your current financial situation. Or it could just strengthen you for some upcoming financial struggles. Research carefully, shop for lower rates, and choose the best option for your life and goals.
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Writer
A veteran wordsmith and research nerd, Brittany Wren spent a decade working in higher education where she helped people overcome challenges to chart a path forward. These days, she writes about personal finance, careers, parenting and education. Her content has been published by a wide variety of brands including T-Mobile, Intuit, LifeLock, Reliant Fund Administration and CURO Financial Technologies Corp.
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