Secured vs Unsecured Personal Loan
Should you pledge savings to get a lower rate, or take an unsecured personal loan? Here is the full comparison with 2026 rate data.
Side-by-Side Comparison
| Feature | Secured Personal Loan | Unsecured Personal Loan |
|---|---|---|
| Collateral | Savings account, CD, or other asset | None required |
| 2026 APR range | 3.0% - 8.0% | 6.49% - 35.99% |
| Typical amounts | $500 - $50,000 | $1,000 - $100,000 |
| Loan terms | 1 - 5 years | 1 - 7 years |
| Credit score needed | Any (collateral is primary factor) | 620+ preferred; 760+ for best rates |
| Approval speed | 1 - 3 days | Same day - 3 days |
| Funds restricted to savings | Yes - savings frozen during loan | No restriction on funds |
| Builds credit | Yes - payments reported to bureaus | Yes - payments reported to bureaus |
| If you default | Lender seizes savings/CD | Collections, potential lawsuit |
| Best for | Bad/thin credit, building credit score | Good credit, no savings to pledge |
How Savings-Secured Loans Work
Top Lender Rate Ranges (April 2026)
| Lender | Type | APR Range | Min Credit Score | Max Amount |
|---|---|---|---|---|
| SoFi | Unsecured personal | 8.99% - 29.99% | 680 | $100,000 |
| LightStream | Unsecured personal | 6.49% - 25.49% | 660 | $100,000 |
| Marcus (Goldman) | Unsecured personal | 6.99% - 24.99% | 660 | $40,000 |
| Upgrade | Unsecured personal | 9.99% - 35.99% | 580 | $50,000 |
| Credit Union (avg) | Savings-secured | 3.0% - 8.0% | Any (savings required) | Up to savings balance |
Rates as of April 2026. Actual rate depends on your credit profile and loan term.
Compare Personal Loan Rates
Pre-qualify with multiple lenders in minutes. No impact on credit score.
Affiliate disclosure: we may earn a commission if you apply through these links.
Frequently Asked Questions
What is a secured personal loan?
A secured personal loan is backed by an asset you already own, most commonly a savings account or certificate of deposit (CD). The lender freezes the funds in your account during the loan term. Because they have a guaranteed recovery, they charge significantly lower rates - typically 3-8% APR - than unsecured personal loans at 6-36%. Once you repay the loan, the hold is released.
How does a savings-secured loan work?
You apply for a loan equal to some or all of your savings balance. The bank places a hold on those funds, preventing withdrawal. You then make monthly payments with interest. When the loan is paid off, the hold is lifted and you can access your savings again. The benefit is a lower rate than unsecured, plus on-time payments are reported to credit bureaus, helping build your credit score.
What is a good interest rate for a personal loan in 2026?
A good rate for an unsecured personal loan in 2026 is below 12% APR, which is achievable with a credit score above 720. The average across all borrowers is approximately 12.04% APR. Secured personal loans backed by savings can reach as low as 3-5% APR. If you are being offered above 25%, consider whether there is a secured alternative or whether improving your credit first would save significant money.
Can I use a personal loan for any purpose?
Most unsecured personal loans are unrestricted in use: debt consolidation, home improvement, medical expenses, weddings, emergencies, and more are all acceptable purposes. Some lenders exclude business use or real estate purchases. Secured personal loans backed by savings accounts are similarly unrestricted. In contrast, auto loans and mortgages are restricted to the specific asset purchase.
Which lenders offer secured personal loans?
Many credit unions offer savings-secured or share-secured personal loans as a core product, often at extremely low rates of 2-5% above the savings rate. Some community banks offer similar products. Online lenders mostly offer only unsecured personal loans. If you want a secured personal loan backed by savings, start with your primary bank or a local credit union.