Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTKellye GuinanThu, September 17, 2026 at 7:05 PM GMT+2 5 min readKey takeawaysSecured auto loans are the most common financing option for borrowers looking to purchase a vehicle.These types of loans tend to offer larger loan amounts and more competitive interest rates compared to unsecured auto loans.In most cases, a secured auto loan is the right move.A secured auto loan uses the car you are purchasing as collateral. It is the standard option on the market. Most banks, credit unions, online lenders and dealerships exclusively offer secured car loans. This helps keep rates competitive and reduces the lender's risk, which can help people with poor credit or no credit history qualify.Because your vehicle secures the loan, your car could be repossessed if you cannot repay it. However, a secured car loan is the best choice for most borrowers. Alongside more competitive rates, lenders may offer terms of up to 96 months and a relatively quick application process. So, while there are benefits to an unsecured loan, you may have better luck finding — and qualifying for — a secured car loan.What is a secured car loan?Secured auto loans are the most common type of auto loan. They are offered by a wide range of lenders that work with borrowers across the entire credit spectrum. While the requirements you need to meet will vary by lender, overall, secured auto loans are much easier to find and qualify for.Like any loan, you will be responsible for repaying the amount you borrow plus interest and fees. When you take out a secured auto loan, you use the car you are purchasing as collateral for the loan. This means that the lender will keep the car title until you finish paying off your loan.If you are unable to repay, the lender can repossess your vehicle and sell it to recoup the loss. Because of this, lenders are more likely to offer competitive rates and work with borrowers with bad credit.Benefits of secured car loansSecured loans can be a good choice if you are looking for a lower auto loan interest rate or to finance a more expensive vehicle. Since they are the standard option for purchasing a car, you will also have an easier time finding a secured auto loan than an unsecured one.Larger loan amountsLenders may finance 110% to 125% of the vehicle's value when you borrow a secured auto loan. This allows you to purchase extras like gap insurance or an extended warranty without paying out-of-pocket. The amount you can borrow is capped based on factors like your income and other debts. However, you can generally find secured loans to cover the cost of more expensive vehicles.Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info