Secured loans often have more paperwork than other types of personal loans. Along with the usual documents, such as a photo ID and bank statements, you should expect to sign forms about asset seizure. These forms confirm that the lender can freeze your bank account, take your car or keep your home, if you default on your loan.
- Driver’s license
- Social Security card
- Passport or visa
- Bank statements
- Federal income tax returns
- W2s or 1099s
- Employment verification
- Credit report
- Collateral, such as a car or home
Unlike many other types of personal loans, you don’t need an average or high credit score for approval. Some lenders work with FICO scores as low as 500 when issuing secured loans. In fact, you might even be able to get a secured loan with a score in the 400s, if you have enough collateral.
You may not qualify for as much money as applicants with unsecured loans, even if you offer a significant amount of collateral. However, you can still receive anywhere from $1,000 to $50,000 in secured funds. Some lenders, such as PenFed, offer secured loans as low as $600. This is a good option if you don’t have many assets.
You might get your funds in just a few days, but some applicants wait weeks or even months. Your lender needs time to review your documents and assess the value of your assets before offering a loan.
A secured loan is an installment loan with a predetermined payment schedule. Expect to make regular payments for two to seven years until your balance is repaid.