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Best Secured Loans For Bad Credit in 2025
Applying for a secured loan requires you to provide reliable collateral, such as your car or house, to get approved. Due to this extra repayment guarantee, secured loans may work for borrowers with poor credit who can’t qualify for traditional loan options.
Additionally, collateral reduces lender’s risks and allows you to qualify for more favorable loan terms. We’ve compiled a short list of companies that offer secured loans for bad credit at reasonable rates. Choose your secured loan option and apply today!
Discover the Best Secured Bad Credit Personal Loans to Get Online
- Be at least 18 years old
- Prove your US citizenship or permanent residence
- Provide your bank account information
- Show your monthly income by providing pay stubs, tax forms, or bank statements
- Provide an active email address and phone number
- Origination fees up to 12%
- $15 late fee
- $15 NSF fee
- Quick access to loan funds
- No prepayment penalties
- Flexible monthly payments
- Soft credit check when prequalifying
- Flexible loan amounts
- Origination fees up to 12%
- High maximum annual percentage rate
- Co-signers aren’t allowed
- Hard credit checks for final approval
- Limited repayment loan terms
Poor credit borrowers who can’t qualify for traditional personal loans
- At least 18 years also
- Permanent US resident
- Income confirmation
- Valid bank account or debit card
- Origination fees: 1% to 10%, or $25 to $500, depending on the state
- Late payment fees: $5 to $30, or 1.5% to 15% of your loan amount
- Non-sufficient funds fees: $10 to $50 per payment returned
- Joint and secured loans are available
- Wide range of loan options for low credit
- Pre-qualifying doesn’t affect your credit score
- Convenient options for debt consolidation
- Relatively high interest rates
- Charges origination fees
- APRs are not disclosed when pre-qualify
- Not available in all states
Borrowers with credit issues who want to avoid predatory lenders.
- Be a U.S. citizen, a permanent resident, or living in the U.S. on a valid visa
- Be at least 18 years old (19 in Alabama and some other states)
- Give a working email address
- Provide valid bank account details
- Confirm a sufficient monthly income to cover your loan payments
- Origination fees: 1.85% to 9.99%
- Late payment fees: $10
- Non-sufficient funds fees: $10 per payment returned
- No prepayment penalties
- Multiple rate discounts
- Next-day funding
- The due date may be changed
- Direct payments for debt consolidation
- APRs may be high
- Origination fees are charged
- Late fees may be applied
Fair-credit borrowers who need the money quickly
- Be at least 18 years old
- Prove your US citizenship or permanent residence
- Provide your bank account information
- Show your monthly income by providing pay stubs, tax forms, or bank statements
- Have fair credit (at least 640)
- Provide an active email address and phone number
- Origination fees of up to 9%
- $15 late fee
- $15 NSF fee
- Low annual percentage rate
- No prepayment penalties
- Wide range of available loan amounts
- Same-day funding under some circumstances
- Accessible for fair credit borrowers
- High origination fee (up to 9%)
- Hard credit checks when you select your loan to move forward
- No cosigners are allowed for joint loans
- It is not available in all states
- Limited repayment options set at either 36 or 60 months
Fair credit borrowers who need to cover various personal needs
- Be at least 18 years old
- Prove your US citizenship or permanent residence
- Provide your bank account information and social security number
- Show your monthly income by providing pay stubs, tax forms, or bank statements
- Provide an active email address and phone number
- Optional fees (up to 6%)
- Low interest rates
- Co-applicants are allowed
- No prepayment penalties
- Flexible loan amounts
- Interest rate discounts are available
- Multiple repayment options
- No origination fee
- Good credit is required for better loan terms
- Hard credit check if you continue your application
- Late fees might apply
- No co-signer option available
- No physical branches
Applicants with good to excellent credit scores who want to consolidate debt, make major purchases, or cover their long-term needs.
What are Secured Personal Loans with Bad Credit, and How Do They Work?
A secured loan is a financial product that is backed by collateral. Collateral can take many forms. It might be a vehicle, a savings account, house furnishings, or another valuable item.
Backing a loan with collateral lowers the lender’s risk since the company can seize your asset for repayment if you default. Therefore, lenders offering secured loans may accept applicants with a poor credit history and give them lower interest rates compared to unsecured loans.
However, what is less dangerous for the lender is not always less risky for you as the borrower. If you can’t repay your secured loan amount, you may lose your asset.
How to apply for a secured personal loan?
To apply for a secured loan, you commonly need to follow these simple steps:
- Choose a loan provider. Access the lender’s terms and eligibility criteria.
- Prequalify. If you meet the requirements and can prove the ownership of your collateral, complete the application online or visit its office during working hours.Provide the needed information and submit the loan request.
- Wait for the approval decision. At this stage, the lender will check your credit, erify your legal ownership of the property, and estimate its market value. Therefore, approval may take about several days.
- Get the funds. If approved, review the terms and accept the offer. The lender will transfer the money in your bank account in 24 hours.
How Much Can I Borrow with a Secured Loan?
Secured loan amounts typically range from $1,000 to $100,000, with some lenders offering higher sums for home equity loans or mortgages. A maximum amount you can get depends on the following factors:
- Income
- Credit score
- Debt-to-income ratio
- Collateral value
These parameters will also affect your APR, fees, and loan terms. You can use a loan calculator to see what estimates of your repayments will be and how they correspond to your current financial shape.
Loan calculator
ESTIMATED MONTHLY PAYMENT
TOTAL LOAN AMOUNT PAID
TOTAL INTEREST PAID
TOTAL COST OF LOAN
Common Secured Loan Uses
Secured loans can be used for a wide range of personal needs. However, most people turn to them when they need to finance a big life project or cover large, long-term needs. Here are some common reasons for obtaining a secured loan:
Bad Credit Secured Loans vs. Unsecured Loans
Secured and unsecured loans have a lot of differences, and knowing them will help you make an informed decision. Let’s examine them step by step:
Collateral
Secured loans are backed by collateral, such as a vehicle, house, savings, or investment account. Meanwhile, unsecured personal loans don’t require any type of pledge.
Interest Rates
A secured loan has lower interest rates thanks to collateral that ensures lenders a borrower can repay it on time. An unsecured loan has a higher interest rate because the lender carries a higher risk.
Loan Amounts
The maximum loan amount you can get through a secured loan is usually higher than that with an unsecured loan. However, it still depends on your income and the value of the collateral provided.
Credit Score Requirements
When you borrow money through secured loans, the credit requirements may be lower. With an unsecured bad credit personal loan, you typically need to have at least fair credit scores.
Funding Time
The funding period of a secured loan may take longer because the loan provider could request the appraisal of your collateral. But with unsecured loans, it could be faster.
How to Compare Personal Secured Loans for Bad Credit?
If you want to find the best personal secured loans for bad credit, here are several factors to consider:
Interest Charges and Additional Fees: Look for loans with the lowest possible interest rates and review whether there are some extra charges that may increase the loan cost. They may include origination fees, administrative costs, and late payment fees.
Collateral: Search for lenders that accepts your type of collateral. Your home, savings account, motorcycle, or boat are several options that you can use to get a secured loan.
Credit requirements: Although not every lender set minimum credit score requirements, make sure you can meet the lender’s criteria before applying for secured loans.
Co-signer availability: Besides secured loans, some lenders may offer options with a co-signer. It could decrease your interest and help you qualify for better repayment terms.
Loan Amounts: Getting a secured loan with bad credit may limit your loan amount to the portion of you collateral’s cost. That’s why ask your lender the maximum loan amount you may get in advance.
Uses: Some lenders may set limits on how you can use your loan. So, choose a lender that doesn’t have any rules on how and where you can spend your money.
Customer reviews: Read all the reviews and discover the experiences of the former customers to see how they rate the lender.
Secured Loan Pros and Cons
Secured loans have several advantages of loans without collateral but also come with certain risks. Let’s take a look at their ins and outs.
Pros
- Higher loan amounts are available. Lenders can offer you a higher loan sum if you provide a valuable asset to back your loan application. It’s typically a portion of your collateral’s price.
- Lenders may offer lower loan APRs. Secured loans come with lower interest rates compared to unsecured options due to less risk loan providers take on.
- Bad credit borrowers can qualify. People with less-than-perfect credit scores have a higher chance to qualify for a secured loan as collateral reduces their risk level for lenders.
Cons
- Longer approval and funding times. Most secured loans involve more paperwork and longer loan processing times due to the collateral assessment process.
- Extra fees. You may be charged extra costs for processing your loan request, underwriting, or administrative expenses.
- Risk of losing your property. If you default on a secured loan, a lender can seize your collateral.
How We Choose The Best Secured Loans for Bad Credit
BadCredify studied hundreds of data from more than 50 of financial companies, including traditional banks, credit unions, fintechs, and online lending companies. We’ve made it to analyze and rate personal loan providers based on their APRs, loan amounts and repayment periods, fees, and other factors.
We weighted the obtained data to rank the lenders in our database and establish star ratings. Here are four major categories we used:
Frequently Asked Questions
How much can I borrow with a secured loan?
Depending on your credit score, income, and the value of your collateral, you can borrow up to $100,000.
What credit score do I need for a secured personal loan?
Most of our selected lenders have no minimum credit score requirements and accept poor credit ratings (below 580). However, some lenders may ask for a credit score of at least 640.
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