What Counts as Collateral for Personal Loans?

What Counts as Collateral for Personal Loans?

There are different kinds of loans you can get. Some of them are called unsecured loans. These don’t require you to put up anything as collateral. There are also secured loans, where you must put up something of value and leverage it to get the money from the lending entity you want.


You can get good personal loans in Utah from various lending entities if you live there. The most common entities you can approach are credit unions and banks. You can go to one of these in person, or you might apply for a loan online in many instances.


If you’re getting a personal loan and looking into the possibility of a secured one, that means you must have something of value you can use as collateral. You may not be sure what would be appropriate to use, though. We will talk about some common options right now.


Your House


Being a homeowner has some significant perks. Being able to use your house as collateral if you need a personal loan is certainly one of those.


You’re in the best position to do this if you own your house outright. However, just because you still have a mortgage on it, that does not mean a lending entity might not be receptive to granting you a loan if your house is your main asset.


The more equity you have built up on your home, the larger of a personal loan you can potentially get for it. If you have very little equity in your home, then you probably can’t get a very large personal loan or a lending entity may not let you get one using this method at all.


Your Car


Your car is another asset that you might leverage to get a personal loan. Like with your house, if your car is paid off, you have a better chance of being able to use it as collateral.


You also have a better chance of getting more money from a lending entity if you use your vehicle as collateral if you have a higher-end car in better condition. If you have an old junker that barely runs, don’t expect to be able to use that for this kind of endeavor.


Other Possibilities


If a house or a car is not available to be used as collateral to get you a personal loan, you can look into more unconventional assets. You might have a piece of jewelry that is valuable enough for you to use. You may have a boat. Perhaps you have some kind of art or another collectible that you’re sure is worth a good deal of money.


Some lending entities will let you get a little more creative with what you put up as collateral, while others will not. That depends on what you have and each individual lender that you approach.


Some less reputable lending institutions will take a wider range of assets as collateral. Using one of these entities comes with its own risks, though.

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