How to Secure a Loan With Personal Items

By Giselle Diamond

  • Overview

    Loans that are secured with personal items are called secured loans. The details of how the secured loan works varies from lender to lender, but the basics are generally the same no matter where you go. A secured loan for a large amount of money (which is usually given through a bank) works like a pawn-shop loan, except on a much larger .
    • Step 1

      Write down what you need the loan for and exactly how much money you will need to request. Add 10 percent of that amount for incidentals. You never know what could be coming your way. Asking for more money than you need is also a good idea in case there is a month when you don't make enough to pay back the loan. At that time, you would be able to use the extra loan money to make that payment.
    • Step 2

      List everything you own that is of value. Have things appraised if you are not sure of their worth. Because secured loans work off collateral, you have to know what you can "barter" with at the bank. This second step entails walking through your home and looking through your bank statements to see what exactly you have to offer the bank to get the loan you need. You can also use a pawn shop to get a loan, though for loans over $2,000, you will most likely have to apply at a bank. Pawn shops will take almost anything of value and hold it until you've paid off the loan in full. Banks act on a more trusting level, which is where your credit comes into play. However, with a bank, you can use a home, car or expensive jewelry as collateral.

    • Step 3

      Do as much research as possible into which lender to use. Using just any lender may not be helpful to you. There are many scammers out there waiting to take as much money from you as possible. This could mean giving you a loan they know you can't afford. Checking the stock market on these lenders can help give you an idea about their reputation. The Better Business Bureau is also an excellent place to do research.
    • Step 4

      Know that different lenders will have you fill out different paperwork. Pawn shops don't require much except a signature. However, if you plan on getting a large loan with a bank by using your home or car as collateral, you may find you have a large amount of paperwork to gather, and later to fill out. Sometimes, it is better to research the typical paperwork used in the loan you're seeking, gather it and then head to the bank.
    • Step 5

      Rest assured that applying for the loan is simple after you have gathered all paperwork and have found the lender you feel will treat you the most decently. Fill out everything in pencil first, look it over and then fill it out in pen. When you are actually signing for the loan, this will be done at the bank.
    • Step 6

      Make your payments on time. Nothing is more destructive to your credit and your ability to get another loan--whether secured or unsecured--than late payments. Besides the necessities in life, these payments should be the very next payments you make each month.
    • Skill: Moderately Easy
    • Tip: To make your payments on time every month, create a budget and stick to it. Otherwise, you could end up using whatever personal item it was that secured the loan in the first place.
    • Warning:
    • Beware of scams! Thoroughly research any institution from which you plan to get a loan. Some banks will charge you more interest than others, and some pawn shops will sell an item before the first payment is even due.

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