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Types of Secured Loans and Lines of Credit

The Benefits of a Secured Loan Video

By using your personal assets such as your home, car, or savings as collateral for a secured loan, you could access lower interest rates and better borrowing options.

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Finding the loan that’s right for your situation is important, so that you get the rates, terms, and payment options that fit your needs. Secured loans might be a good choice if you have personal assets such as equity in your home, car, or savings account that can be used as collateral. Plus, secured loans may offer lower interest rates, larger loan amounts, or better terms than unsecured loans.

Types of secured loans and lines of credit

Here are a few personal assets that can help you secure a loan.

Your savings

If you use your CD or savings account as collateral for a personal loan or line of credit, you can typically qualify within hours and have the funds within the same or next business day. You could also receive the added benefit of a lower Annual Percentage Rate , compared to an unsecured option.

You can also use your savings as collateral for a secured credit card. Secured cards work like any other credit card, but the credit line is determined by how much money you place into a security deposit account as collateral.

With a secured credit card, you can build or rebuild your credit history by using the card responsibly and making your payments on time. Keep in mind that the security deposit is collateral and can’t be used to make payments. While credit line minimums and security deposits vary by lender, Wells Fargo offers a secured card starting at $300.

Your car

Using the value in your car could help you qualify for a secured loan with better terms and lower rates. And, if you refinance your current auto loan, you may be able to lower your rate.

By using the equity in your car, you may also be able to free up cash for other expenses, such as managing your debt. On average, customers who used a Wells Fargo auto refinance plus loan were able to receive an additional amount of $6,348 to use for other expenses.

Auto refinancing options

Your home

Consider using the equity in your home to help pay for home improvements or a large expense. To know how much equity is available to you, look at the difference between your home’s market value and how much you still owe on your mortgage. For example, if you own a home currently valued at $300,000 but still owe $200,000 on your mortgage or to lenders, your equity in the home is $100,000.

At Wells Fargo, you can access the equity in your home with:

 Need funds quickly? 

Wells Fargo customers who use their qualifying Wells Fargo CD or savings account as security for their loan or line of credit may qualify for a loan within hours and have the funds within the same or next business day.

Annual percentage rate

The annual percentage rate, or APR, is the rate, for a payment period, multiplied by the number of payment periods in a year. In other words, it describes the annual interest rate on a loan for a whole year, rather than the monthly rate.