July 13, 2021 Last updated July 13th, 2021 3,222 Reads share

3 Secured Loans to Consider During a Financial Emergency

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If you’re not prepared to cover an unexpected financial expense, you may realize you need quick access to cash. Whether you need funds for an emergency car repair, medical bill, or vet visit, secured loans are an option that can get you the money you need. Here are 3 secured loans you can consider using during a financial emergency.


Why Use a Secured Loan?

A secured loan is backed by some kind of collateral, like your home, car, or investment account. When you agree to take out a secured loan, the lender will put a lien on the asset you’ve decided to leverage for cash. The lender can repossess and sell the collateral if you fail to repay the loan.

Because secured loans are backed by collateral, they have several factors that set them apart from unsecured loans, including:

  • More lenient eligibility qualifications: Since unsecured loans are not backed by any physical asset, some lenders will rely more heavily on your credit score and financial history when deciding whether to lend you money. You may be able to qualify for a secured loan with a lower credit score if your collateral holds enough value.
  • Lower interest rates: Because lenders have security to repossess and sell your collateral if the loan is not repaid, they can afford to charge lower interest rates.


3 Secured Loans to Consider

Title Loan

In a pinch, you can use your vehicle’s value to take out a title loan. To qualify for a title loan, you’ll need to own the vehicle and have access to its clean title. That means you can’t have any existing unpaid parking tickets, liens, or other loans.

By visiting a title loan lender, you can often have money for your vehicle’s title within a few hours. Title loans also allow you to continue driving your car while you repay the loan. But if you fail to repay the amount you borrowed, the lender can repossess your vehicle.

Home Equity Loan

If you own your home, you may be able to use what you’ve already paid toward your mortgage to free up cash. Home equity loans enable you to receive a lump sum that you’ll repay in fixed payments over a specified term. These loans tend to work well if you know exactly how much you need to borrow.

Because a home equity loan uses your house as collateral, they typically have lower interest rates than other loan types. But the big downside is that if you’re unable to pay back the loan, it puts your house at risk of going into foreclosure. So, before you decide to tap equity to take out funds, make sure you can repay the amount you take out.

Secured Personal Loan

You can take out a secured personal loan using many different types of collateral, including investments, art, or jewelry. A secured personal loan is a way to get access to the cash you need while also helping to build your credit score when you repay the loan on time.

While lenders will still review your credit score and income, they may have more lenient requirements since you’re offering collateral. But, as with other types of secured loans, you’ll want to be sure to pay back the amount due on time, or you may lose your collateral.


Benefits of Getting a Secured Loan

Here are some benefits of getting a secured loan when you need money right away:

Easy Application Process

Many secured loans have an easy application process that you can complete in just a few minutes. With some loans, like title loans, you may even have the option to apply from the comfort of your own home if an online application is available.

Get Funds Quickly

If you get approved for a secured loan, you may be able to receive the funds in your bank account the same day you apply, within 24 hours, or in a few days. This is great if you need money quickly to cover an unexpected expense like a home repair bill or medical bill.

Good Credit Not Needed

Since you’ll provide an asset you own as collateral for a secured loan, you may not need good credit to get approved. Many lenders that offer secured loans will approve borrowers with a poor or fair credit score.


The Bottom Line

Secured loans are a way to use your assets to get quick access to cash. And in an emergency situation, they can be enough to tide you over until you can repay the loan. If you decide that a secured loan is right for you, compare lenders and loans to find the option that meets your needs. Once you choose a secured loan with a safe and reputable lender, just be sure to understand the loan terms and repayment expectations before you commit.



Manas Kundu

Manas Kundu

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