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Secured personal loans require collateral — such as a savings account, vehicle, or other asset — which reduces the lender’s risk and typically results in lower interest rates. These loans are particularly useful for borrowers with lower credit scores who want better terms.
Compare the best secured personal loan options available.
Last Updated: January 2026
A secured personal loan works exactly like a regular personal loan — you borrow a lump sum, repay it in fixed monthly installments over 2–7 years at a fixed interest rate — with one critical difference: you pledge an asset as collateral. If you stop making payments, the lender has the legal right to seize that asset to recover their money.
That collateral changes the risk equation for lenders dramatically. An unsecured loan relies entirely on your creditworthiness and promise to repay. A secured loan has a tangible backup plan. This is why secured loans exist for borrowers who struggle with unsecured approvals: the collateral absorbs the risk that the credit score cannot.
The practical result: lower rates, higher approval odds, and often larger loan amounts than you would qualify for unsecured. According to Federal Reserve data, the rate spread between secured and unsecured personal loans averages 3–7 percentage points for borrowers in the fair credit range (580–669 FICO). On a $15,000 loan over 4 years, that spread saves $2,000–$4,500 in total interest.
These lenders offer legitimate secured personal loans with transparent terms. Sorted by collateral type for easy comparison.
| Lender | Collateral Type | APR Range | Amounts | Terms | Orig. Fee |
|---|---|---|---|---|---|
| First Tech FCU | Savings / CD | 6.99–18.00% | $500–$50K | 6 mo–7 yr | None |
| Regions Bank | Savings / CD / MM | 9.24–29.99% | $2K–$50K | 3–5 yr | None |
| Navy Federal CU | Savings / CD | 8.99–18.00% | $250–$50K | Up to 5 yr | None |
| PenFed CU | Savings / CD | 7.74–17.99% | $600–$50K | 1–5 yr | None |
| Best Egg | Home fixtures / Vehicle | 8.99–35.99% | $2K–$50K | 3–7 yr | 0.99–9.99% |
| Upgrade | Vehicle | 7.74–35.97% | $1K–$50K | 2–7 yr | 1.85–9.99% |
| OneMain Financial | Vehicle | 18.00–35.99% | $1.5K–$20K | 2–5 yr | Varies |
| Oportun | Vehicle (title) | 19.90–35.99% | $300–$12K | 1–4 yr | Up to 10% |
Rates from lender websites as of January 2026. Your rate depends on creditworthiness and collateral value. Rates subject to change.
Savings accounts and CDs are the safest collateral for borrowers. Your money stays in the account — the lender places a hold on it (you cannot withdraw), but it continues earning interest. If you default, the lender takes the funds from the held account. If you pay as agreed, the hold is released when the loan is paid off. Credit unions (First Tech, Navy Federal, PenFed) are the best source for savings-secured loans, often with APRs capped at 18% and zero origination fees.
Vehicles are the most common collateral for secured personal loans. The lender places a lien on your car title. You keep driving the car — it stays in your possession the entire time. But if you fall behind on payments, the lender has the legal right to repossess. Key requirements: you must own the car outright (no existing car loan), the vehicle must meet age and mileage requirements, and you need full-coverage auto insurance. Upgrade, Best Egg, and OneMain Financial all accept vehicle collateral.
Home fixtures are a newer option pioneered by Best Egg. Instead of putting your entire house at risk (like a home equity loan), you pledge permanent fixtures — built-in cabinets, bathroom vanities, lighting installations. The lender places a lien on the fixtures, which shows up in title searches. This can complicate selling or refinancing your home until the loan is paid off, so think carefully before choosing this route.
If you have $5,000+ in a savings account or CD, a savings-secured loan from a credit union is the gold standard. You get the lowest rates (often 7–12%), your money stays in the account earning interest, and the risk of losing your savings is entirely within your control — just make the payments. It is the safest form of secured borrowing available.
Choose secured if: Your credit score is below 620 and unsecured lenders are either rejecting you or offering rates above 25%. A secured loan at 12–18% saves thousands compared to the unsecured alternative at 28–35%. Also choose secured if you want the absolute lowest rate available and you have savings or a vehicle you can confidently pledge — even borrowers with good credit can benefit from the 3–5 point rate reduction.
Choose unsecured if: You qualify for a no-fee unsecured loan at an APR you can afford (under 15–18% for most borrowers). The risk-free nature of unsecured borrowing — no assets on the line — is worth a slightly higher rate. Also prefer unsecured if your only collateral is a car that you depend on for commuting. Losing your transportation to a defaulted loan creates a cascading financial disaster.
The hybrid approach: Some borrowers use a secured loan strategically to build credit. Take a small savings-secured loan ($1,000–$3,000), make 12 months of perfect payments, and your score climbs 30–60 points. Then refinance into an unsecured loan at a better rate — or simply qualify for better secured credit card and unsecured loan options going forward.
Defaulting on a secured loan triggers a specific chain of events that unsecured loan default does not. After a missed payment (typically 30 days late), you get a notice. After 60–90 days, the lender initiates recovery proceedings. For vehicle-secured loans, this means a repossession agent showing up to take your car. For savings-secured loans, the lender debits the held account.
Beyond losing the collateral, default also devastates your credit. A repossession stays on your credit report for 7 years and can drop your score 100–150 points. The lender may also pursue a deficiency judgment if the collateral does not cover the remaining loan balance — meaning you lose the asset AND still owe money.
The prevention is simple: only borrow what you can reliably repay. Set the loan to autopay. Build a one-month payment buffer in your checking account. If you hit financial trouble, contact the lender immediately — many offer hardship programs (payment deferrals, modified plans) that prevent default. Lenders would rather work with you than go through the expensive repossession process.
For borrowers rebuilding from bad credit, a secured personal loan is one of the most effective tools available. Every on-time payment gets reported to all three credit bureaus (Equifax, Experian, TransUnion). After 6–12 months of perfect payments, most borrowers see a 30–60 point score increase — often enough to cross from “fair” into “good” credit territory and unlock better unsecured options.
The credit mix benefit is also significant. If your credit profile is heavy on credit cards (revolving credit) and light on installment loans, adding a personal loan diversifies your credit mix — worth 10% of your FICO score. A small savings-secured loan ($1,000–$2,000) is the lowest-risk way to add this diversification.
The strategy works best with credit union savings-secured loans. Deposit $1,500 into a savings account at a credit union like PenFed or First Tech. Borrow $1,500 against it at 8–12% APR. Your savings earns interest while the hold is in place. You make 12–24 monthly payments. When the loan is paid off, your savings are released, your credit score is significantly higher, and the total cost (interest paid minus savings interest earned) is typically $80–$200 — a cheap price for 40–60 points of credit improvement.
If your goal is credit building, choose the longest term available with the smallest loan amount. More months of on-time payments means more positive data on your credit report. A $1,000 loan over 24 months creates 24 positive payment entries — twice the benefit of the same loan over 12 months. The extra interest on a small loan is minimal (often under $100) and well worth the credit-building impact.
This distinction is critical. A car title loan and a vehicle-secured personal loan both use your car as collateral — but the similarity ends there. Title loans are short-term (15–30 days), charge APRs of 100–300%, require no credit check, and are designed to trap borrowers in a cycle of renewals. The CFPB classifies them alongside payday loans as predatory products. Many states have banned them outright.
A vehicle-secured personal loan has a 2–7 year term, charges 8–36% APR (with most borrowers falling in the 10–20% range), evaluates your credit and income, and reports payments to credit bureaus. It is a legitimate financial product from a licensed, regulated lender.
If someone offers you a “loan on your car title” with no credit check and a 30-day term, that is a title loan — not a secured personal loan. Walk away. Even the most expensive secured personal loan on our list (Oportun at 35.99% max APR) is a fraction of the cost of a typical title loan. For alternatives, see our emergency loans guide.
The most common options are savings accounts, certificates of deposit (CDs), and vehicles. Best Egg also accepts home fixtures. Credit unions are the best source for savings-secured loans with the lowest rates. Vehicle-secured loans are available from Upgrade, Best Egg, OneMain Financial, and Oportun.
Yes. The collateral reduces lender risk, so approval requirements are more relaxed. Borrowers with credit scores as low as 550 (or even lower at some credit unions) can qualify. Some savings-secured loans have no minimum credit score requirement at all — the savings deposit guarantees the loan.
Typically 3–7 percentage points lower for the same credit profile. A borrower who gets 22% unsecured might see 15–17% secured. At the credit union level, savings-secured rates can drop below 10% even for fair credit borrowers.
Generally no. Most lenders require you to own the vehicle outright with a clear title. If you still have a car loan, the existing lender holds the first lien. Some lenders (like Best Egg) may work with vehicles where you have significant equity, but this is uncommon.
The lien is released. For savings-secured loans, the hold on your account is removed and you regain full access to your funds. For vehicle-secured loans, the lender releases the lien on your car title. The collateral was never taken from you during the loan — the lender simply had a legal claim on it that expires when the loan is fully repaid.
OneMain Financial offers both secured and unsecured loans with no published minimum credit score. With 1,500+ branches, in-person service is available.
Upgrade accepts credit scores as low as 580 and offers loans from $1,000 to $50,000. Reports to all three credit bureaus, helping build credit with on-time payments. Funds typically deposited within one business day.
Best Egg has funded over $24 billion in loans since 2014. They offer a simple online application with funding as fast as one business day. Origination fees range from 0.99% to 8.99%.
SoFi offers some of the largest personal loan amounts available, up to $100,000. SoFi charges no origination fees, no prepayment penalties, and no late fees. Members get access to financial planning, career coaching, and unemployment protection that pauses payments if you lose your job.
Prosper is a peer-to-peer lending marketplace connecting borrowers with individual investors. Offers loans from $2,000 to $50,000 with terms of 24 to 60 months.
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