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. Personal loans give us leverage to afford things we wouldn’t otherwise be able to afford, allowing us to set up our future in a more stable way. Or they may get us out of a difficult financial situation with only a few financial bumps and bruises instead of serious long-term harm.
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. For example, the collateral for auto loans is the vehicle. 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. Typically, you won’t have to pay application fees for these lenders, but be sure to read the fine print before putting in your personal information.
Related: Best Personal Loans for Bad Credit
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Overview of the best secured personal loans
Financial Company | Best For |
OneMain Financial | Bad credit |
Best Egg | Low APR (annual percentage rate) |
First Tech Federal Credit Union | Low APR, no origination fees |
Upgrade | Online lending |
Navy Federal Credit Union | Long-term loans |
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
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Best secured personal loans
OneMain Financial
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).
Best Egg
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 8.99% 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.
One important note: Best Egg loans are unavailable in Iowa, Vermont, Washington, D.C., West Virginia, or U.S. Territories.
Related: Debt Consolidation for Bad Credit
First Tech Federal Credit Union
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.
Related: Best Personal Loans for Fair Credit
Upgrade
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 8.49% 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.
Navy Federal Credit Union
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.
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.
Summary of the best secured personal loans
Financial company | What they offer | Annual Percentage Rates |
OneMain Financial | No minimum credit requirement, very high APR, multiple processing fees, vehicle required as collateral | 18.00-35.99% |
Best Egg | Online application, good credit required, low APR, flexible repayment | 8.99% - 35.99% |
First Tech Federal Credit Union | Very low interest rates, no fees, use (specific) business stock as collateral, very high loan amounts, offers a payment protection plan | 3.00% |
Upgrade | Online application, moderate credit necessary, no prepayment penalties, may use a vehicle as collateral | 8.49% - 35.99% |
Navy Federal Credit Union | Long-term loans, low interest rates, use savings as collateral, no minimum credit score | Share rate + 2 to 3% |
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.
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.
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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