Personal Loan with Collateral
Check offers in seconds
Get pre-qualified for loan offers with an easy online form
Won't impact your credit
Checking offers will not impact your credit score
Competitive payment options
Funding up to $100,000 and APRs as low as 6.24%1
Receive funds quickly
Understand Personal Loans with Collateral
You may want a personal loan with collateral for several reasons. When you put up collateral, loans are often easier to qualify for and may come with more competitive terms.
Quick. Simple. Secure.
How To Apply For Personal Loan with Collateral
Fill out an easy online form to check for pre-qualified offers with no impact to your credit score
Compare terms and payment options to select the offer that’s best for you
Complete your application on your selected lender’s website
After your loan is approved, your funds should arrive within 1-2 business days2
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“The process couldn’t have been any easier. I filled out a short form that took me less than 2 minutes and within seconds I got multiple offers from lenders.”
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FREQUENTLY ASKED QUESTIONS
Learn More About Personal Loan with Collateral
Some lenders may offer the options for a personal loan with a car as collateral or another form of collateral. If you have bad credit, you may want to consider a personal loan with collateral. Keep reading to learn more.
Read more - FAQ
Can you put up collateral for a personal loan?
Yes, putting up collateral for a personal loan is something you can do if you believe it will improve your chances of qualifying for a larger sum of money or if you want to lock in a lower interest rate. Essentially, there are two main types of personal loans; secured and unsecured. Unsecured personal loans are the most common type of personal loan and they do not require collateral. Instead, you qualify based on your credit history and creditworthiness. A secured personal loan is obtained by using an asset as collateral that the bank or lender will have access to in the event that you default on the loan.
Secured personal loans are also very common among borrowers who have poor credit. If you have a credit score below 550, you may find it extremely difficult to qualify for an unsecured personal loan. By using an asset like a second vehicle, your home, or a significant savings/retirement account, you may increase your chances of qualifying for a personal loan, even if your credit score is less than stellar. It is important to remember that there are dire consequences for defaulting on any personal loan, even if you did not use collateral to secure the loan. With a secured loan, you could risk having a lender pursue a lien against your home, vehicle, or whatever collateral you used to obtain the loan. With an unsecured personal loan, you could do some serious damage to your credit score and get sued by a lender.
Do banks do collateral loans?
Yes, banks commonly work with borrowers who are pursuing secured personal loans. In fact, some loans have the collateral already built into the framework of the loan. For example, when you are looking for a mortgage to purchase a new home, it is a given that a bank can foreclose on your home if you default. Home equity loans are similar in that your home is at risk if you are unable to pay the bank. When someone gets a car loan, again, the lender can repossess the vehicle in an attempt to minimize their financial losses in the event you stop making payments. A secured personal loan is similar to the above-mentioned loan types, however, the collateral that is used to obtain the loan is not automatically tied into the loan. Therefore, you and the lender will need to come to an agreement on what kind of collateral you should use to secure the loan for the amount you are seeking.
Is it hard to get a loan with collateral?
Actually it is the opposite. It is much easier to get a personal loan by using an asset as collateral. Not only is it easier to obtain the loan, but you could also qualify for a larger sum of money and possibly a lower interest rate by using collateral. The only thing that is difficult about the loan process when you are using collateral is the extra paperwork that goes along with a secured personal loan. In terms of qualifying, it is actually easier to obtain a personal loan when you are willing to use an asset as collateral.
What items can be used as collateral for a loan?
Essentially, anything that has tangible financial value can be used as collateral for a personal loan. The idea is that the bank or lender will be able to sell the collateral to pay off the loan in the event that you default. Here are a few quick examples of what other borrowers have used as collateral in the past.
A significant cash savings account.
A CD (certificate of deposit) cash account.
Home or a second property like a vacation home or investment property.
Stocks, bonds, and other investments.
An insurance policy.
Antiques or family heirlooms.
Gold, silver, and other precious metals.
These are just a few examples of what a bank may consider collateral. Ultimately, it is up to the bank or lender to decide whether or not your offering of collateral will be substantial enough to secure the loan for the amount that you are seeking.
How much collateral is needed for a personal loan?
The amount of collateral that is needed to secure a personal loan is completely up to the lender. Typically, the collateral should be an asset that could be sold to cover the total loan amount. If the collateral happens to be worth much more, then the remaining proceeds from the sale of the asset will be returned to the borrower.
Do collateral loans build credit?
Yes, if you have little or no credit, a collateral loan could be an excellent way to begin to build a solid credit history. As long as you make all the payments in full and on time, then your credit score should see some gains when the lender reports your on-time payments to the credit bureaus. Additionally, a secured personal loan may be all you can qualify for when you have little or no credit. Be wary of Payday lenders and cash title loan centers that charge insanely high-interest rates. You are better off seeking a collateral loan through a trusted online lender or your personal bank.
Why do banks ask for collateral while giving loans?
Why do banks ask for collateral while giving loans?
The answer is simple. Banks ask for collateral so that they can protect their investment and recoup any potential losses that may occur if you happen to default on the loan. It is a way for banks to protect themselves and their shareholders from potential losses due to loan defaults. Ultimately, a bank is a for-profit institution, and secured personal loans are a way to make sure they do not suffer any financial harm when they loan a sum of money to a borrower.
How do I get a loan using my car as collateral?
To get a loan by using your car as collateral, the first thing that needs to happen is the bank will probably need to send a professional to inspect your vehicle. They can examine the car’s age, condition, and consider how much its value has depreciated. Once they consider these main factors, the lender can come to a conclusion of how much your car is worth. Lenders typically will allow a loan to be made that is somewhere between 80% and 150% of the value of the car depending on your credit score.
Where can I get a personal loan with collateral?
Some lenders may offer personal loans with collateral or without collateral. A personal loan that does not require collateral is called an unsecured loan. A personal loan that does require collateral is called a secured loan. Some banks, credit unions, or online lenders may offer secured personal loans.
If you have credit challenges, a personal loan with collateral may be a good option. However, there is more risk for the borrower when they provide collateral. You may first want to try to qualify for an unsecured personal loan. At Acorn Finance you can check personal loan offers within 60 seconds or less without impacting your credit score. Checking offers is a step in the right direction toward finding the best personal loan offer.
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