What are Secured Personal Loans?
Secured personal loans are a type of loan that is backed by collateral, such as a car, bank account, or other valuable assets. By pledging something of value, borrowers can more easily qualify for a loan or secure a more competitive interest rate. However, these loans also come with risks, as borrowers may lose the collateral if they fail to repay the loan.
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Secured personal loans work similarly to other personal loans, but with a key difference: they are secured by collateral. This means that the lender has a claim on the collateral in case the borrower defaults on the loan. Borrowers can use secured personal loans for a variety of purposes, including paying off high-interest debt, making large purchases, or financing home improvements.
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Top Secured Personal Loan Picks for July 2026
Our top picks for secured personal loans include:
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- First Tech Federal Credit Union: First Tech offers secured personal loans backed by either a savings account or a share certificate. There are no fees, flexible loan terms, and same-day funding possible.
- Upgrade: Upgrade offers secured personal loans backed by a car, with an origination fee of 1.85%-9.99%. Borrowers can get funding fast and may be able to secure better terms than with an unsecured loan.
- Navy Federal Credit Union: Navy Federal offers two types of secured loans, backed by a savings account or a certificate of deposit. The credit union has the lowest potential APRs among our top picks, along with other competitive features.
Each of these lenders has its own unique features and benefits. For example, First Tech Federal Credit Union offers flexible loan terms and no fees, while Upgrade offers fast funding and the possibility of securing better terms than with an unsecured loan. Navy Federal Credit Union, on the other hand, has the lowest potential APRs among our top picks.
How to Qualify for a Secured Personal Loan
To qualify for a secured personal loan, borrowers typically need to meet certain eligibility requirements. These may include:
- Having a good credit score
- Having a steady income
- Having a valid form of identification
- Having a valid social security number
Borrowers may also need to provide documentation, such as proof of income, employment, and identification. It’s essential to carefully review the loan agreement and understand the terms and conditions before accepting the loan.
Risks and Considerations
Secured personal loans come with risks, as borrowers may lose the collateral if they fail to repay the loan. It’s essential to carefully review the loan agreement and understand the terms and conditions before accepting the loan. Borrowers should also consider the potential consequences of using collateral to secure a loan, such as losing possession of a vehicle or wiping out savings.
