Best secured personal loans you can qualify for — even if your credit needs work

A personal loan can be a useful financial tool for financing just about anything from unexpected expenses to home renovations. Most personal loans are unsecured, meaning they don't require any collateral. However, if your credit leaves a lot to be desired, such a loan can be difficult to qualify for or come with high interest rates.

When that's the case, secured personal loans can be helpful. Some lenders allow backing a personal loan with an asset, such as a car or funds in a savings account. If the secured loan results in a default, they can repossess the collateral to recoup the loss. Minimizing the lending risk this way, lenders can work with borrowers with different credit profiles and offer better terms.

CNBC Select compared personal loan lenders based on credit requirements, loan amounts, repayment terms and other factors to find the best secured loan offers. (See our methodology for more information on how we choose the best secured personal loans.)

Who's this for? Upgrade can be an excellent choice for a personal loan lender if you have at least fair credit (FICO scores of 580 to 669).

Most loans from Upgrade are unsecured, but in some cases, you can get an option to add your car as collateral to qualify or get a better rate. In this case, the lender will need information such as the year, make, model and mileage of the vehicle. Based on that, Upgrade will provide available loan offers. If you're approved, the lender will also request that you send your car's title to finalize the loan.

Upgrade offers personal loans of up to $50,000. Note that origination fees can run quite high, from 1.85% to 9.99%, and are deducted from loan proceeds. There's also a late fee of up to $10 which kicks in after a 15-day grace period. However, there's no penalty if you pay off the loan early. Funds should arrive in your checking account within one business day of submitting the required documents and being approved for a loan.

Who's this for? For those with bad credit (579 or lower), getting qualified for a personal loan may be especially challenging. OneMain Financial works with borrowers even with low credit scores by offering a secured loan option to help them qualify.

OneMain can accept an eligible vehicle as collateral. The lender requires a first lien on the vehicle titled in the borrower's name, plus current insurance. The vehicle must also meet OneMain's loan-to-value requirements. Typical collateral includes cars, motorcycles and trucks. However, other vehicles such as RVs, trailers and boats can also be considered.

One tradeoff is the interest rates. While the upper APR limits lenders offer can run quite high, OneMain also has a comparatively high minimum APR. For that reason, if your goal is to lower your interest rate by pledging collateral, you might not get the best deal with OneMain. At the same time, borrowers with poor credit are more likely to be approved for a higher APR to begin with, so this factor might not bear as much weight.

OneMain provides loans of up to $20,000 and charges no penalty fees. Origination fees vary by state and can be a flat amount ranging from $25 to $500 or a percentage between 1% and 10%. The same goes for late fees, which can be $5 to $30 or 1.5% to 15%.

Who's this for? Building credit usually requires borrowing to show a positive payment history. However, traditional loans and credit cards often come with high interest rates, making credit-building a potentially expensive venture. A savings-secured loan can be a cheaper alternative — and the First Tech Savings Secured Loan comes with attractive terms.

With a savings-secured loan, the funds in your savings account serve as collateral. The First Tech credit union offers APRs as low as 3% on such loans, with amounts anywhere between $500 and $500,000, depending on how much you have in a savings account with First Tech.

The loan term can be as long as 96 months, and there's no penalty if you pay early. Additionally, First Tech doesn't charge application, origination or annual fees on its savings-secured loans.

You'll need to be a First Tech member with a savings account at the credit union before you can apply. However, there are plenty of ways to join, including being a member of the Computer History Museum or the Financial Fitness Association which offer memberships for a small donation.

Who's this for? A secured loan from Best Egg could be worth considering if you own a home but don't want to borrow against its equity (or you don't have enough equity yet).

This loan uses permanent fixtures in your home, such as cabinets and vanities, as collateral. This way, you can gain access to lower interest rates without tapping into your home equity. There's no appraisal required since the loan offer is based on your credit history.

According to Best Egg, about half of the customers receive funds the next day. Once verification is complete, the money should arrive in your bank account within one to three days. Note that the lender charges an origination fee of 0.99% to 8.99% of your loan amount.

While you might want to hold on to your home equity, using permanent fixtures as collateral comes with its own risks. Best Egg will place a lien against them, which will appear in title searches of your home. This can make it difficult to sell or refinance your home until you repay the loan in full.

Getting a secured personal loan might not always make sense if your credit is in good shape. You probably don't want to risk your assets when you can qualify for a loan that doesn't require collateral. However, if your credit needs quite a bit of work, a secured loan may offer an excellent way to gain financing, as well as improve your credit score. While your options of lenders offering secured loans may be more limited, it still pays to show around and find the best deal for you.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every personal loan list is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best secured personal loans.

To determine which secured personal loans are the best in the market, CNBC Select analyzed close to a dozen U.S. personal loans offered by both online and brick-and-mortar banks, including large credit unions.

When narrowing down and ranking the best secured personal loans, we focused on the following features:

• Credit score requirements: We gave preference to lenders that work with borrowers with less-than-ideal credit.
• Fixed-rate APR: Variable rates can go up and down over the lifetime of your loan. With a fixed rate APR, you lock in an interest rate for the duration of the loan's term, which means your monthly payment won't vary, making your budget easier to plan.
• Flexible minimum and maximum loan amounts/terms: Each lender provides more than one financing option that you can customize based on your monthly budget and how long you need to repay your loan.
• No early payoff penalties: The lenders on our list do not charge borrowers for paying off loans early.
• Streamlined application process: We considered whether lenders offered same-day approval decisions and a fast online application process. 
• Customer support: Every loan on our list provides customer service available via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
• Fund disbursement: The loans on our list deliver funds promptly through either an electronic wire transfer to your checking account or in the form of a paper check.

• Creditor payment limits and loan sizes: The above lenders provide loans in an array of sizes, from $500 to $500,000. Each lender advertises its respective payment limits and loan sizes, and completing a preapproval process can give you an idea of what your interest rate and monthly payment would be for such an amount.

The rates and fee structures advertised for personal loans are subject to fluctuate in accordance with the Fed rate. However, once you accept your loan agreement, a fixed-rate APR will guarantee your interest rate and monthly payment will remain consistent throughout the entire term of the loan. Your APR, monthly payment and loan amount depend on your credit history and creditworthiness. To take out a loan, many lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more.

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