Secured vs Unsecured Loan
Secured loans offer rates as low as 3-12% with collateral. Unsecured loans range 6-36% with no asset required. Compare both types side by side and calculate your total interest cost.
Secured vs Unsecured Loan Comparison
Full comparison of key features, rates, and requirements for both loan types.
| Feature | Secured Loan | Unsecured Loan | Winner |
|---|---|---|---|
| Interest Rate | 3-12% APR | 6-36% APR | Secured |
| Collateral Required | Yes (home, car, savings) | No | Unsecured |
| Typical Loan Amount | $5,000 - $500,000+ | $1,000 - $100,000 | Secured |
| Loan Term | 1 - 30 years | 1 - 7 years | Secured |
| Credit Score Requirement | 620+ (lower acceptable) | 670+ (good credit needed) | Secured |
| Approval Speed | Several days to weeks | 1 - 3 business days | Unsecured |
| Risk to Borrower | Asset at risk if default | Credit damage only | Unsecured |
| Common Uses | Mortgage, auto, HELOC, boat | Personal, debt consolidation | Depends |
| Monthly Payment (on $15k/5yr) | ~$296/mo at 7.5% | ~$381/mo at 18% | Secured |
| Total Interest (on $15k/5yr) | ~$2,752 | ~$7,852 | Secured |
Example payments based on $15,000 loan over 5 years at typical market rates. Actual rates depend on credit score, lender, and loan type. Updated 26 March 2026.
Loan Cost Calculator
Compare total interest paid on a secured vs unsecured loan side by side
How much you want to borrow
Typical: 3-12%
Typical: 6-36%
Secured Loan
Monthly payment
$300.57
Total interest
$3,034.15
Total cost
$18,034.15
Unsecured Loan
Monthly payment
$380.90
Total interest
$7,854.08
Total cost
$22,854.08
Interest Savings with Secured Loan
$4,819.93
You save $4,819.93 in interest by choosing a secured loan at 7.5% vs 18.0%
When a secured loan makes sense
If you are borrowing a significant sum (above $25,000), have an asset to offer, and can wait a few days for approval, a secured loan will almost always save you money in interest. Mortgages and auto loans are the most common examples where the lower rate provides substantial long-term savings.
When an unsecured loan makes sense
Unsecured loans shine when you need money quickly (often funded same day), the amount is relatively small, you do not want to risk any assets, or you have excellent credit and can qualify for a competitive rate. Debt consolidation personal loans are a common use case when credit card rates are higher.
How your credit score affects both
Credit score matters more for unsecured loans. With a 760+ score, you can access unsecured rates as low as 6-8%, narrowing the gap with secured rates. With a 600 score, unsecured rates of 25-36% make secured loans far superior. For secured loans, a lower score mainly affects whether you qualify, not as much the rate.