How to Find a Secured Personal Loan

By Ana Jackson, eHow Contributor

updated: December 4, 2010

A secured personal loan involves pledging an asset or assets to back the loan. Secured personal loans are appealing due to their cost-effectiveness. You typically pay lower interest rates, as the collateral reduces the lender's risk. If you default on the loan, the lender can sell the collateral to minimize the loss. If you're considering applying for a secured personal loan, it is important to follow the right procedure.

Difficulty: Moderate

Instructions

Things You'll Need:

• Collateral

1. 1
   Take inventory of your assets. Decide what you would like to use as collateral for your secured personal loan. For example, you can use a car, a boat, a motorcycle or a motor home. Other options include CD savings accounts and cash investments.
   
2. 2
   Determine your credit score. If you don't know what it is, purchase it from either of the three major credit bureaus: Equifax, Experian and TransUnion. You can also obtain it from FICO for a fee of about $15.
   
3. 3
   Request a copy of your credit report from annualcreditreport.com. The service is free. Examine the report, and make sure that all the information is accurate.
   
4. 4
   Compare the products available from at least three different lenders. Banks and credit unions are an ideal place to start, as these types of lending institutions generally offer lower interest loans. Compare the repayment amounts, interest rates and any applicable fees, as well as the terms and conditions.
   
5. 5
   Opt for a loan with a fixed interest rate, which means that the monthly payment will remain the same for the length of the loan.
   
6. 6
   Provide your contact and employment information, and offer the collateral.
   
7. 7
   Read all the terms and conditions thoroughly before signing the contract.

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