Best Secured Personal Loan Rates From 3.50% in December 2025
Looking for a lower rate or bigger loan? Offering collateral could be the key
Best secured personal loan lenders with the lowest rates
Secured loan rates
If you’re shopping for a secured loan, compare the average APR for your credit bracket to your offers to see if they’re competitive.
| Credit tier | Average APR |
|---|---|
| Excellent (800+) | 19.33% |
| Very good (740-799) | 21.16% |
| Good (670-739) | 23.29% |
| Fair (580-669) | 27.17% |
| Poor (under 580) | 30.37% |
Calculate your payment with your secured personal loan rate
Expert insights on secured personal loans
If you’re borrowing a large amount of money, a secured personal loan may be the right move. That’s because offering collateral can boost your approval odds and lower your interest rate, which is a really big deal when your loan amount is large and the payoff period is long.
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What is a secured personal loan?
A secured loan is a personal loan backed by collateral, which is typically a personal item like a car, savings account or investment account. The lender can take that collateral if you don’t repay the loan.
Secured loans vs. unsecured loans
Compared with unsecured loans, secured loans:
- Are easier to qualify for
- Can offer lower interest rates because of the collateral
- Can help people with poor or limited credit build their credit history
Learn more about secured versus unsecured loans.
How secured loans work
Step 1
Get approved and paid
A lender will evaluate both your creditworthiness and your collateral. Once approved, you’ll get a lump sum and the lender will place a lien on your collateral.
Step 2
Make monthly payments
You’ll repay the loan in equal installments while continuing to use your collateral normally.
Step 3
Close out the loan
When you make your final loan payment, the lender removes the lien and you keep your collateral. If you default, however, the lender can repossess your collateral.
Make sure you have the right car insurance. The lender will almost certainly require you to have full coverage (comprehensive and collision).
Also, you usually have to own your car outright to use it for a secured loan. If you’re still making payments, consider an auto equity loan instead.
Pros and cons of secured loans
Pros
-
Lower rates
Secured loans typically have lower interest rates than unsecured loans. -
Easier to qualify for
Secured loans could be a good option if you’re building credit or have a lower score. -
Higher loan amounts
Offering collateral can help qualify for a bigger loan.
Cons
-
Can be risky
Aside from hurting your credit score, not paying back a secured loan means you can lose your collateral. -
Not as common
Most personal loans are unsecured. -
Can be predatory
Certain types of secured loans (like title loans and pawn shop loans) can be predatory. You can find plenty of predatory loans online, too. -
Possible fees
Can come with an origination fee. The lender will take this out of your loan before sending it to you.
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How to choose the best personal loan for you
| Your financial goal | Your game plan | Tips |
|---|---|---|
| Consolidating various debt | Get a personal loan with a lower annual percentage rate (APR) than what you’re currently paying on your debts. | Focus on each loan’s APR, which reveals its total cost, not just its monthly payments. The most affordable loan is the one with the lowest APR. |
| Refinancing credit card debt | Pay down high-interest credit card balances using a personal loan with a lower rate. You’ll reduce interest costs and simplify payments. | Choose a personal loan term that gives you affordable monthly payments, but also pays off the loan quickly enough to minimize total interest costs. |
| Making home improvements | Get a personal loan to fund renovations, repairs or upgrades that enhance your home. | Consider whether the improvements will help pay for themselves by adding value to your home. If not, you may want to reconsider or search for a lower-rate loan option, like a home equity loan or HELOC. |
| Paying off everyday bills | Use a personal loan to cover essentials like groceries or utilities during a temporary financial hardship. | Choose a loan that covers only what you need for immediate necessities. Consider this to be a short-term solution while you address the underlying financial issues. |
| Covering other major expenses | Get a personal loan to fund a one-time expense, whether essential needs like medical bills or car repairs, or planned events like weddings and vacations. | Only borrow for non-essentials if you can comfortably afford the monthly payments. Also consider whether you could save up for discretionary purchases instead of borrowing. |
Other types of secured personal loans
We’ve already touched on auto-secured and savings-secured loans, but those aren’t the only options out there. Other secured personal loans include:
-
Certificate of deposit (CD) loan
This loan uses an existing CD as collateral. A CD is a type of investment account that you usually get from a bank or credit union. You can usually borrow up to the amount in your CD. -
401(k) loan
This one is a bit different from a personal loan. If you have a 401(k), which is a retirement savings plan from your job, you might be able to borrow money from it as a 401(k) loan. The interest you pay goes back into your own 401(k). But, leaving your job early may require repaying the loan all at once or facing a 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.
Secured loans for bad credit borrowers often fall under predatory lending. For context, most financial experts agree that a loan may be predatory if it charges rates that are higher than 36%. Due to high interest rates or excessively short repayment terms, avoid the loans below.
Title loans: Car title loans are like car-secured loans but 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 could have several weeks to several months to pay back your loan, interest and fees, depending on where you live.
Applying for secured loans with bad credit
If you have shaky 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.
-
Know how much your collateral is worth
Lenders don’t typically approve larger loans if you have bad credit. Finding out how much your collateral is worth before applying can give you a better idea of how big of a loan you can ask for. -
Check your credit scores and reports
Don’t get penalized for incorrect or outdated info. Get a free copy of your credit report from AnnualCreditReport.com and dispute errors you might find. -
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.
Get your own credit report card for free with LendingTree Spring. We’ll show you how you’re doing on each of the factors that affect your credit, like payment history and credit utilization. Plus, we’ll give you personalized recommendations on how to improve your score.
Alternatives to secured personal loans
If you need money now
- Buy now, pay later (BNPL): You can split up purchases (including groceries and in some cases, bills) by using BNPL. 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.
- Auto equity loan: Auto equity is how much value you have in your vehicle, minus what you currently owe on your auto loan and depreciation. An auto equity loan lets you borrow from that.
- Joint loan: A joint loan is a personal loan that you share with another person. Borrowing with someone who has good credit can help you get approved if you don’t qualify for a loan by yourself.
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 your deposit amount.
- 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.
Frequently asked questions
Secured loans are easier to qualify for than unsecured loans, but that doesn’t mean everyone is approved. Even if you offer collateral, you’ll still need to meet the lender’s credit requirements. The lender will also have rules about what it will accept as collateral.
The best way to see if you’re eligible is by prequalifying for a personal loan. Prequalification only uses a soft credit pull so it doesn’t hurt your credit score.
A secured loan can be a good idea for the right person, especially if you have less-than-perfect credit or want a lower rate. Secured loans come with extra risk, though. The lender can repossess your collateral if you get too far behind. Always use a personal loan calculator before to make sure you can afford a monthly loan payment.
Our methodology
We reviewed more than nine lenders that offer secured personal loans to determine the overall best four options. To make our list, lenders must offer secured loans with competitive APRs. We also considered the type of collateral each lender requires. According to our systematic rating and review process, the best secured personal loans come from Best Egg, Digital Federal Credit Union (DCU), OneMain Financial and Upgrade.
Accessibility. We look for lenders with fewer barriers to approval, lower credit requirements, wider geographic access and faster funding.
Rates and terms. We prioritize lenders that offer low starting rates, minimal fees, flexible terms and APR discount opportunities.
Repayment experience. We choose lenders with strong reputations, convenient self-service tools, responsive support and borrower-friendly perks.
Why trust our methodology?
Our writers and editors dig through the facts, contact lenders directly and even go through the application process ourselves if it helps better explain what you can expect. As a Certified Financial Education Instructor℠, I’m committed to breaking down complex financial details so people can make confident, informed decisions with their money.
Jessica’s experience in editing and financial education helps shape LendingTree articles that are clear, accurate and truly useful to readers. Her certification means our recommendations are built on a foundation of consumer-first financial knowledge — not just numbers.