Secured personal loans let borrowers pledge collateral in order to borrow money. Secured loans may be easier to qualify for and can have lower rates than unsecured personal loans.
Checking rates is free and won't impact your credit score.
Best for secured credit union loans
7.89 - 18.00%
$500 - $50K
None
6 months to 7 years
Best for secured bank loans
8.74 - 24.99%
$1K - $50K
680
1 to 7 years
Best for secured loans for debt consolidation
2025 NerdWallet award winner
7.74 - 35.99%
$1K - $50K
600
2 to 7 years
Best for secured loans and credit-building tools
6.99 - 35.99%
$2K - $50K
600
3 to 5 years
Best for secured loans for bad-credit borrowers
6.70 - 35.99%
$1K - $75K
None
3 to 5 years
Our team of consumer lending experts follows an objective and robust methodology to rate lenders and pick the best.
30+
Lenders reviewed
We review over 35 lenders, including major banks, top credit unions, leading digital platforms, and high interest installment lenders operating across multiple states.
25+
Categories assessed
Each lender is evaluated across five weighted categories and 27 subcategories, covering affordability, eligibility, consumer experience, flexibility, and application process.
60+
Data points analyzed
Our team tracks and reassesses hundreds of data points annually, including APR ranges, fees, credit requirements, and borrower tools, ensuring up to date, accurate comparisons.
We evaluate more categories than competitors and carefully weigh how each factor impacts your experience.
NerdWallet’s review process evaluates and rates personal loan products from more than 30 financial technology companies and financial institutions. We collect over 60 data points 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.
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Note that the information for each lender is specific to its unsecured loans. Qualification criteria and loan details may differ for secured loans.
Learn about our selections for the best lenders for secured personal loans.
First Tech Federal Credit Union lets you use a savings account or share certificate as collateral for a secured personal loan. You’ll need to be a member of the credit union to borrow money.
U.S. Bank offers a secured personal loan where you use a certificate of deposit as collateral. Having a bank account at U.S. Bank may also help you benefit from faster funding, larger loan amounts and longer repayment terms.
Upgrade offers secured personal loans using either a vehicle you own or fixtures in your house (like ceiling fans, built-in bookshelves and lights) as collateral.
If you’re getting a secured personal loan to consolidate debt, Upgrade has a rate discount for borrowers who allow the lender to send funds directly to their creditors.
Best Egg lets homeowners use permanent home fixtures (like built-in cabinets, light fixtures and bathroom vanities) as collateral for a secured personal loan. The lender also has a secured personal loan option that lets you use your car’s value as collateral.
If your credit is low, take advantage of Best Egg’s financial health tools like credit monitoring, credit insights and debt payoff trackers.
Upstart lets you use your vehicle as collateral for a secured personal loan. This lender is a fitting borrowing option if your credit score is low, because it doesn’t have a minimum credit score requirement.
Upstart considers non-traditional criteria, like your education background and employment history, rather than focusing primarily on your credit score.
A secured personal loan is a loan you get by providing a valuable asset you own, typically a vehicle or savings account, as collateral in exchange for borrowed money that you repay over time. If you fail to repay the funds, the lender can take your collateral to recoup its losses.
Like an unsecured loan, your credit, income and other debts are central to getting approved for a secured loan. When you add collateral for a secured loan, the lender sees you as less of a risk of not repaying the loan. In turn, approval odds can be better for secured loans, and the rate is typically lower.
Some lenders offer secured loans only after an applicant pre-qualifies for an unsecured loan and doesn’t meet the lending requirements. If you don’t see a secured loan option, you can ask the lender directly about secured loans.
The type of asset you can use as collateral varies by lender. The lenders that NerdWallet reviews allow the following types of collateral for secured personal loans:
If you don’t repay a secured personal loan as promised, the lender can take the asset you pledged as collateral. If the lender reports loan payments to the three major credit bureaus — Equifax, Experian and TransUnion — your credit score will likely drop as well.
Having a secured personal loan with a lower annual percentage rate than an unsecured personal loan means you’ll have lower monthly payments and overall interest costs.
The average APR for loan applicants with bad credit (scores from 300 to 629) who pre-qualified through NerdWallet in 2024 was 21.65%. But say you instead get a secured loan with a lower rate of 16.65%. Here's the difference in costs between those two options for a three-year, $10,000 loan.
Loan examples | APR | Monthly payment | Total interest |
|---|---|---|---|
Loan 1 | 21.65%. | $380.10. | $3,683.47. |
Loan 2 | 16.65%. | $354.79. | $2,772.36. |
» MORE: Secured vs. unsecured loans: What’s the difference?
Use our personal loan calculator to compare costs on personal loans after plugging in your desired loan amount, repayment term and estimated rate.
Estimated monthly payment
$309.92
Total interest over 3 years
$1,156.95
Total loan payment
$11,156.95
Loan amount
$10,000
Interest rate
7.25%
Loan term (years)
3
Weigh the benefits of getting a secured loan against the potential drawbacks before you borrow.
The process for getting a secured loan can vary based on your lender and its requirements for the type of collateral you’re using, but here are some of the basic steps you’ll take:
» MORE: How to get a personal loan
Here are other loan and credit options requiring collateral.
Home equity loans and HELOCs: A home equity loan or home equity line of credit (HELOC) 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.
401(k) loans: You may be able to borrow a portion of the money in your 401(k) plan for a period of up to five years. When you take out a 401(k) loan, however, you’re missing out on potential market gains and compound interest from your retirement savings.
Secured credit card: With a secured credit 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 credit score. Like with a loan, ensure you can make payments on the card before using it for purchases.
Consumer advocates say 36% is the highest APR a loan can have to be considered affordable. Pawnshop loans and car title loans, however, can have rates well above 100%. Only consider these high-interest secured loans if you’ve exhausted other options.
Also be aware of predatory lending tactics — like a lender refusing to disclose rates or encouraging you to borrow a larger amount than you requested. Check the lender’s license and read customer reviews to avoid loan scams.
Since secured loans require you to risk a car, savings account or other collateral — and because they’re somewhat rare — it’s a good idea to compare other options.
Unsecured personal loans: See if you qualify for an unsecured personal loan before you pledge collateral on a secured loan. If your credit score is low, try qualifying with online lenders and credit unions over traditional banks. You could boost your chances of loan approval if you apply with a co-signer or co-borrower who has better credit or a higher income.
» COMPARE: Best personal loans for borrowers with bad credit.
Cash advance apps: Cash advance apps let you borrow a few hundred dollars from your upcoming paycheck. They usually don’t require a credit check, but they can come with fees and may request optional tips.
Buy now, pay later: Many major retailers offer “buy now, pay later” plans that break up the cost of an item or service over a few weeks or months. A popular plan is four biweekly payments with no interest. BNPL plans typically don’t involve a hard credit check.
Family loan: Borrowing money from a trusted family member or friend could help you avoid a credit check and high interest rates. Establish a loan agreement so both parties understand how the money will be repaid.
Secured loans may be easier to get than unsecured loans because they're less risky for lenders. Borrowers with fair and bad credit may have a better chance of qualifying for secured loans.
Secured loans can have lower rates than unsecured loans because the lender can take your collateral if you fail to repay.
