What Can Be Used as Collateral for a Personal Loan?

No one likes being in debt, but there are some instances and life situations where you just can't avoid taking out a personal loan.

And of course, you want to be able to keep your loan's APR as far down as possible.

What Can Be Used as Collateral for a Personal Loan

How do you do that? By providing good collateral for your personal loan.

If you don't know what can be used as collateral for a personal loan, then you're in the right place. In this article, we'll show you a few different things that you probably own that you can put up as surety for your financial obligation.

Your Home

You knew this one was coming. It's probably the most significant asset you own, so your home can always be put up as collateral for your personal loan if you have enough of your mortgage paid off.

With a home equity loan, you essentially take out a second mortgage on your house in exchange for a lump sum of funds to spend as necessary.

If you fail to make the payments at any stage, the lender can take your home.

Your Car

After your home, your car is probably the next most significant figure in the black column of your assets and liabilities.

Some lenders won't allow you to use a car that isn't yet paid off, so keep that in mind if you're banking on using your vehicle as collateral in title loans.

Investment Accounts

If you've been smart with your money in the past and have been putting it away in a fixed deposit or some other investment account, then you could use that as collateral for your personal loan.

However, keep in mind that when you put up your investment account as collateral, you probably won't be able to access it for the period of time that the loan is open.

To add to it or take out from it, you'll need to pay down the loan first. This could have significant repercussions if you were planning on making some significant moves with that account soon.


If you've built up a significant jewelry collection over the years, then that's something that you can put up on the chopping block as collateral. 

Careful, though — lenders love to shortchange you on the value of the jewelry whenever you're considering various items to put up as surety.

You should consider getting your items appraised by an independent jeweler so that you can come to the conversation with your lender of choice with a based knowledge of what each item is worth.

What Can Be Used as Collateral for a Personal Loan?

There you have it — now that you know exactly what can be used as collateral for a personal loan, you're all ready to talk to your lender to make it happen. Remember not to put up anything that you're not okay with losing should paying back the loan not work out.

For more financial advice, be sure to take some time to check out the rest of the articles on the website!

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