Best Secured Loans for 2019

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TD Bank

TD Bank

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Editor's Take

TD Bank is an established bank, and one of the largest in the nation. Their secured loans help you build your credit with a low, variable interest rate. To apply, you’ll either need to visit a branch in person or call to speak directly to a lending specialist.

There’s no annual fee, but you do need to pay a $50 origination fee, which you’ll need to pay at the time of closing without rolling into the loan. Your collateral can be cash in either a TD Bank savings or money market account, or a certificate of deposit.

Loan Features

  • Loan Amount
    $5,000 to $50,000
  • Rate Type
    Variable
  • Term
    12 – 60 months

Details

  • No annual fee
  • Interest rate: prime + 2%
  • No minimum credit score

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Finova Financial

Finova Financial

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Editor's Take

Finova Financial offers secured loans using your vehicle equity as collateral. These are designed as emergency loans for people whose cars or trucks are completely paid off. You’ll also need to provide proof of comprehensive and collision insurance for your vehicle.

Loan Features

  • Loan Amount
    $750 – $50,000
  • Rate Type
    Fixed
  • Term
    12 months

Details

  • Available in 7 states
  • No prepayment penalty
  • No minimum credit score

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KeyBank

KeyBank

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Editor's Take

You can use cash you have stored in a KeyBank CD, savings, or investment account as collateral for a secured personal loan. The interest rate is fixed so you can expect stable monthly payments. However, if you pay off the loan within the first 18 months, you’ll be charged a $150 prepayment penalty fee.

Loan Features

  • Loan Amount
    $5,000 minimum
  • Rate Type
    Fixed
  • Term
    Up to 60 months

Details

  • Available in 15 states
  • 0.25% rate deduction for autopay
  • Prepayment penalty fee: $150

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Pros and Cons of a Secured Loan

Before you commit to a secured loan, it’s important to make sure you know what you’re getting into. They can be a great tool in rebuilding your credit, but the repair process does come with a price.

When using your savings account as collateral, you’re essentially paying (in interest and fees) to borrow the same amount you already have. Plus, many secured loans come with above-average interest rates since they’re generally used by low credit borrowers.

Still, if you’re stuck in the credit repair process, you can make progress with a secured loan. This is especially true if you’re preparing to take out a large loan in the near future, such as a mortgage or auto loan. Building a solid credit history can help you qualify for better rates on a larger, longer loan. Just know that whatever you use as collateral, whether cash or a car, can be taken by the bank if you default on your loan.

Frequently Asked Questions

Does a secured loan help your credit?

Yes, a secured loan helps build your credit score with each payment you make on-time. Of course, it can hurt your credit score if you’re continuously late more than 30 days. Also consider which credit bureaus your lender reports to. Ideally, they’ll report to all three, but it’s still smart to check.

How long does a secured loan take?

If you’re using funds that are already in an account with your lender (such as a savings account), the approval process can be fast. Once you’re approved, many lenders are able to get your funds to you within a couple of business days, and sometimes even on the same day.

See if You Qualify for a Secured Loan!

Contact a preferred lender today to get a quote on your secured loan.

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