Best Secured Loans in the USA – that will be the topic of today’s article.
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Introduction
Loans play a key role in our lives during certain emergencies or achieving financial dreams.
Sometimes we are eligible for securing a loan and sometimes it becomes hard.
Especially during times of emergencies, not being able to secure a loan makes the problems worse.
One of the major deciding factors for acquiring a loan is the credit score. Some people may have a good credit history, and for such people, it is easy to get a loan.
On the other hand, there are some people who may not have a good credit score.
For such individuals, getting a loan from any financial situation becomes very hard.
Even if they get a loan, either the interest rate is going to be higher or the loan amount will be lower.
That’s when secured loans are considered highly beneficial. One of the main advantages of a secured loan is that you get lower interest and higher amounts.
What is a secured loan?
A secured loan is a loan backed by something valuable as collateral. In most cases, things kept as collateral for secured loans are:
— House
— Vehicle
— Home equity
— Savings accounts
— Certificates of deposit
The chances are most likely that you won’t even need to have a great credit score.
Among all the options available today, it may become hard to find the right secured loan. Especially, in the U.S.
That’s why I have come up with some of the best secured loans available for people living in the United States.
This includes financial institutions such as banks and credit unions located in the United States.
Let us begin.
Upgrade
Among most contenders, Upgrade stands out as one of the best secured loan providers.
At Upgrade, you need to keep your automobile as collateral for a secured loan. Hence, it is known as an Auto Secured Loan.
Loan Amount
At Upgrade, you can get a loan amount of up to $50,000, depending on certain factors.
APR
The APRs for a secured loan at Upgrade range from 6.95% to 35.97%.
Credit score required
A credit score of around 560 can be able to get you qualified at Upgrade.
Terms and fees
The loan terms usually vary from two years to seven years. To get approved, the time taken can be as little as one day.
To begin with, Upgrade charges a loan origination fee of 2.9% to 8%.
There is a late payment fee of $10, which comes with a 15-day grace period.
An insufficient fund fee is charged by Upgrade, which is $10.
Eligibility
Like with any other loan provider, the loan applicant should be at least 18 years of age.
They must have a DTI ratio which does not exceed 75% and should have recurring income.
As for the collateral, the automobile should not be older than 20 years. It should also be insured.
It should be owned by the applicant and must not be involved with liens or leases.
Motorcycles, ATVs, RVs or commercial vehicles cannot be accepted as collateral.
To access the secured loan offered by Upgrade, click here.
OneMain Financial
At OneMain Financial, the secured loans are backed by motor vehicles.
Loan Amount
OneMain Financial is known to offer secured loans ranging from $1,500 to $20,000.
APR
With this provider, the APRs range between 18% to 35.99%
Credit score required
There is no specific requirement for credit score mentioned by this lender. Nonetheless, it is ideal to have a credit score of at least 600 to 650.
Terms and fees
The term periods range from two years to five years, and it can take seven days for approval.
OneMain Financial charges a loan origination fee of 1% to 10%. Otherwise, the loan origination fees can also be between $25 to $500.
There is a late payment fee of 1.5% to 15% or it can be from $5 to %30. There is also an insufficient fund fee, which is between $10 to $50.
Eligibility
The applicant should be at least 18 years old and must have recurring income.
The vehicle being kept as collateral should not be older than 10 years. It should be under the name of the applicant and have valid insurance.
Applicants are required to submit documents such as ID proof, proof of residence, and income proof.
Depending on the lender’s necessities, some other documents may also be necessitated.
To access the secured loan offered by OneMain Financial, click here.
PenFed Credit Union
PenFed Credit Union offers two types of secured loans namely Auto Refinance and HELOC.
Home Equity Line of Credit (HELOC) comes with a draw period and repayment period.
This means you can withdraw the amount whenever you want during the draw period. You can pay off the amount within the repayment period based on your agreement with the lender.
Auto Refinance loan is offered by requiring an automobile as collateral. Whereas a HELOC is offered by allowing you to tap into your home equity.
Loan Amount
If you select HELOC, the amount ranges between $25,000 to $50,000.
With PenFed, you can tap into the home equity of multiple properties as well. If that’s the case, then the loan amount will not exceed $1 million.
If you select the Auto Refinance option, you can get around $500 to $150,000.
APR
For a HELOC, the APRs vary depending on the type of property used as collateral.
For a primary residence or a second home, the APR is around 5% to 18%.
For investment properties, the APR is around 4.7% to 18%.
Regardless of the type of property, an introductory rate is in effect at PenFed Credit Union. During the introductory period of the first six months, you pay an APR of 0.99%
Credit score required
At PenFed Credit Union, the minimum requirement for a credit score is 660.
Terms and fees
As said before, there will be a draw period and a repayment period for HELOCs.
At PenFed Credit Union, the draw period is for 10 years and the repayment period is 20 years.
When talking about Auto Refinance, the term period is going to be between three to seven years.
Both types of secured loans will take around one to seven days for approval.
There is a late payment fee of $29 and an insufficient funds fee of $30.
For HELOCs, an annual fee of $99 is charged at PenFed Credit Union. This is only applicable when at least $99 wasn’t paid as interest in the previous year.
Closing costs of $500 to $8,500 apply for HELOCs when the loan amount is $500,000 or more.
There are appraisal fees for HELOCs ranging from $550 to $850. This is only applicable when the credit lines exceed $400,000.
Eligibility
One must be at least 18 years of age and be a member of the Pentagon Federal Credit Union.
The applicant’s maximum DTI ratio should not exceed 50%. They must have a reliable source of employment income or benefits from the government.
While applying for a HELOC, it is necessary to have an equity of at least 20%. Those who apply for a HELOC should have the collateral property under their name.
As for Auto refinance, the vehicle should be of a 2021 model or newer. The collateral vehicle should not have driven miles more than 7,501 miles.
There are some eligibility criteria regarding the vehicle being kept as collateral.
To access the secured loan offered by PenFed Credit Union, click here.
U.S. Bank
At U.S. Bank, there are four choices for those who to acquire a secured loan. They are:
— Home Equity Line of Credit (HELOC)
— Home Equity Loan
— Smart Refinance
— Cash-Out Refinance
Depending on the type of loan chosen by you, features such as loan amount or APR differ.
No matter which option you choose, you will need to have home equity to be kept as collateral.
Let us have a brief look at the secured loans offered by U.S. Bank.
Loan Amount
At U.S. Bank, you can get a secured loan amount ranging from $25,000 to $200,000. The actual loan will depend on the specific type of loan you choose.
APR
HELOC: 4.95% to 9.35%
Home Equity Loan: 6.10%
Smart Refinance: 5.79% to 5.99%
Cash-Out Refinance: variable rates
Credit score required
At least a score of 660 to 730 will make you eligible for a secured loan at the U.S. Bank. The actual credit requirements may vary based on the type of loan you choose.
Terms and fees
Regarding the term period, it can be up to a maximum of 20 years depending on the loan.
Approval takes between one to seven days and may differ depending on your loan type.
U.S. Bank charges a late payment fee of $10 and an early closure fee of $90. You may also be subject to initial escrow-related costs.
Eligibility
The applicants should be at least 18 years and have a reliable employment income.
The DTI score of the individual should not exceed 60%.
For getting lower rates, for some loan types, you will need to have a U.S. Bank checking account. There may also be a requirement for a FICO score of 730 to get the lowest possible rates.
The properties being offered as collateral must be owned by the applicant and have insurance.
In certain states, the properties which are being held in a trust won’t qualify as collateral.
To access the secured loan offered by U.S. Bank, click here.
First Tech Credit Union
Just like the U.S. Bank, there are four different options available for borrowers. They are:
— Savings Secured Loans
— Certificate Secured Loans
— Stock Secured Loans
— Stock Secured Lines of Credit
Savings secured loans are offered with a First Tech savings account as collateral.
Certificate secured loans are offered with First Tech Share Certificate as collateral.
Stock secured loans and stock secured lines of credit are offered with stocks as collateral.
This refers to stocks owned by an individual belonging to the company they work for. Such stocks should be listed on NYSE, NASDAQ or AMEX.
Loan Amount
Stock Secured Loans and Stock Secured Lines of Credit: $25,000 to $1 million
Certificate Secured Loans and Savings Secured Loans: $500 to $500,000
APR
Stock Secured Loans: 5.10% to 5.70%
Stock Secured Lines of Credit: around 10.50%
Certificate Secured Loans: 3% additional to the certificate earnings rate
Savings Secured Loans: 3% additional to the savings earnings rate
Credit score required
It is estimated that an individual might need a credit score of 660 for getting any of these loans.
Terms and fees
Depending on the loan you choose, the term period can vary from 5 to 12 years.
There are no origination fees or prepayment fees at First Tech Federal Credit Union.
Eligibility
There is no particular eligibility criteria other than a credit score of 660. However, you will need to have the relevant collateral available with the credit union.
To access the secured loan offered by First Tech Credit Union, click here.
Navy Federal Credit Union
Navy Federal Credit Union also had four types of secured loans available for borrowers. They are:
— Savings Secured Loan
— Certificate Secured Loan
— Home Equity Loan
— Home Equity Line of Credit (HELOC)
Savings Secured Loan requires a savings account at Navy Federal Credit Union as collateral.
Certificate Secured Loan requires a Share Certificate (CD) as collateral.
Both the Home Equity Loan and the HELOC are offered with home equity as collateral.
Loan Amount
Savings Secured Loans: $25,000 to $50,000
Certificate Secured Loans: $30,000 to $50,000
Home Equity Loans and Home Equity Lines of Credit: $10,000 to $500,000
APR
Savings Secured Loan: 2% to 3% additional to the current savings earnings rate
Certificate Secured Loan: 2% additional to the certificate earnings rate
Home Equity Loan: 5.74% to 18%
Home Equity Line of Credit (HELOC): 5.75% to 18%
Credit score required
The lender does not specify any minimum requirement for a secured loan on their website.
Terms and fees
Savings Secured Loan: up to 180 months
Certificate Secured Loan: up to 60 months
Home Equity Loan: 5 to 20 years
Home Equity Line of Credit (HELOC): 20-year draw period and a 20-year repayment period
There is a late payment fee of $29 on these loans offered by Navy Federal Credit Union.
For a loan amount of up to $250,000, there are closing costs ranging between $300 to $2,000.
Eligibility
Those who want a secured loan from Navy Federal Credit Union should be a member. They should be at least 18 years old and should have a consistent source of income.
To access the secured loan offered by Navy Federal Credit Union, click here.
Credit Union 1
Credit also has four types of secured loans available for its customers, which are:
— Share Secured Loans
— Share Certificate Secured Loans
— Credit Saver Loans
— Home Equity Line of Credit
A share secured loan and a credit saver loan are offered with company shares of an individual being kept as collateral.
A share certificate is offered with a share certificate (CD) being kept as collateral.
The HELOC is offered when an individual tap into his/her home equity.
Loan Amount
The loan amounts are not disclosed by Credit Union 1 on their official website.
APR
Share Secured Loans: 3% to 6% additional to share dividend rate
Share Certificate Secured Loans: 3% to 6% additional to the certificate earnings rate
Credit Saver Loans: 3% to 6% additional to the share dividend rate
For a Home Equity Line of Credit, the APR will generally be the prime rate plus 0.50%.
A prime rate is the index rate at which most lenders set their APRs. However, the minimum APR will not go below 3.74% and the maximum is capped at 18%.
Credit score required
There is no requirement for a minimum credit score at Credit Union 1.
Terms and Fees
The term period is up to 60 months for share secured loans, CD secured loans and credit saver loans.
HELOCs come with a repayment period of up to 20 years.
Account opening fee: $10
Origination fee: 0.5% to 3.5%
Processing fee: $49
HELOCs don’t have an appraisal fee or an application fee. However, there is an annual fee of $75 applicable to HELOCs.
Eligibility
There isn’t any specific eligibility criteria disclosed by Credit Union 1. Nevertheless, you should be a member of this credit union to get approved.
To access the secured loan offered by Credit Union 1, click here.
Oportun
Oportun offers a secured loan which is backed by the automobile of a borrower.
Loan Amount
With the help of Oportun’s auto secured loan, you can get a loan amount of up to $2,525 to $20,000.
APR
The APRs range from around 7.99% to 35.99%, yet the actual rate depends on different factors.
Credit score required
There is no credit score requirement specifically disclosed by the lender.
Terms and Fees
Borrowers can select a term period between 21 months to 46 months. It takes around one to seven days for approval at Oportun.
Oportun charges a loan origination fee of up to $300. There is also a late payment fee of 5% of the amount due, which is capped at $10. This late payment fee is only applicable after a 10-day grace period.
Oportun charges an administrative fee of $75 when the loan amount exceeds $5,000. There is also an insufficient funds fee of $15 at Oportun.
Eligibility
Applicants must be at least 18 years old and should earn a minimum of $500 per month.
Only applicants from Arizona, California, Florida, New Jersey, and Texas are approved.
Borrowers are required to provide up to four personal references. The collateral automobile should be owned by the applicant with no car loan payment dues.
To access the secured loan offered by Oportun, click here.
Figure
Figure offers two types of secured loans namely HELOC and Crypto Mortgage Plus.
As usual, the Home Equity Line of Credit is offered with home equity as collateral. We are not going to discuss Crypto Mortgage Plus as it isn’t launched yet.
Loan Amount
With the HELOC offered by Figure, you can get a loan amount of $15,000 to $400,000. The actual loan amount will depend on the location as well as the property.
APR
The APR for a HELOC at Figure is between 3.99% to 11.5%. However, a discount of 0.75% is offered to members who activate the autopay feature.
Credit score required
Figure has a minimum credit score requirement of 620. Those who wish to get the lowest possible rates must have a score of at least 800.
Terms and Fees
The term period for a HELOC can be set up to 30 years. The funding process can take around five days.
A loan origination fee is applicable on the first draw, which is 4.99%. Some other fees such as subordination fees and recording fees also apply.
Eligibility
Figure only offers loans to residents from one of the 42 states as mentioned on their website.
To access the secured loan offered by Figure, click here.
Bottom Line
Most of the loans in this list come with very low APRs which is advantageous for borrowers.
Secured loans are also beneficial for people to enhance their low credit scores.
When picking a secured loan, it is better to opt for the lowest rates possible.
Higher interest rates will often lead to a situation where you become a victim of the debt cycle.
I am not affiliated with any of the lenders mentioned in this list and neither do I endorse them.
Most of the information provided in this article is accurate and up to date. But there is a good chance that the information might be outdated by the time you read this.
Therefore, I strongly suggest getting in contact with the relevant lender to know the actual details.
With proper budgeting and maintaining a healthy reserve of funds, there won’t be a necessity for loans.
Nevertheless, secured loans are really handy when they can’t get low APRs or high amounts.
Investing your savings and properly planning your financial situation will help avoid many problems.
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Do you seek someone who can take of your investment needs based on your financial situation?
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