Does OneMain Financial Require Collateral for a Loan?

OneMain Financial does not always require collateral, but it often does. The company offers both secured and unsecured personal loans, and whether you need to pledge an asset depends on your credit profile, income, existing debts, and how much you want to borrow. Larger loan amounts require a first lien on a qualifying vehicle, while smaller loans for borrowers with stronger credit may be approved without any collateral at all.¹

When OneMain Requires Collateral

OneMain looks at your credit history, income, and debts during underwriting. If those factors are strong enough, you may qualify for an unsecured loan backed only by your promise to repay. If the lender views you as higher risk, or if you want to borrow a larger amount, it will typically ask you to secure the loan with an asset. OneMain’s disclosures state directly that larger loan amounts require a first lien on a qualifying vehicle.¹

There is one group that cannot pledge collateral even if they wanted to. Active-duty service members, their spouses, and dependents covered by the Military Lending Act are not eligible for secured loans at OneMain and cannot pledge any vehicle as collateral.² The federal statute caps the APR on covered consumer credit at 36% and prohibits lenders from requiring vehicle title security from covered borrowers.³

What OneMain Accepts as Collateral

When a secured loan is required, OneMain accepts several types of personal property. Cars, trucks, motorcycles, and recreational vehicles such as RVs are the common examples. The asset has to hold enough value to support the loan amount and must be titled in your name, or in a co-applicant’s name if one is on the loan.¹

You cannot pledge someone else’s vehicle or an asset you don’t legally own. The ownership requirement exists so OneMain can place a valid lien on the property.

Vehicle Standards

If you’re using a vehicle as collateral, it must be no more than ten years old, meet OneMain’s value requirements, be titled in your name, and carry valid insurance.⁴ OneMain also needs a first lien position. If another lender already holds a lien because you still owe money on the vehicle, OneMain may not accept it unless that existing loan is paid off first.¹

During underwriting, the lender assesses the vehicle’s current market value to determine how much you can borrow against it. High mileage, significant damage, or limited resale value can result in a lower loan offer or rejection of the vehicle as collateral.

Why You Might Want a Secured Loan Anyway

Collateral is not purely a cost. Secured loans at OneMain generally carry lower interest rates than unsecured loans because the collateral reduces the lender’s risk. OneMain states directly that APRs are higher on loans not secured by a vehicle.⁵ If you have the option of either and want to lower your rate, pledging a vehicle can be worth it.

Documents You’ll Need if the Loan Is Secured

If your loan requires collateral, you’ll need to provide several documents before closing:

The vehicle title, in your name or a co-applicant’s name, clear enough for OneMain to record a first lien. If the original is lost, request a replacement from your state’s motor vehicle agency before applying.
Government-issued photo ID, such as a driver’s license.
Proof of insurance on the vehicle. Comprehensive and collision coverage typically must stay active for the life of the loan, with the lender listed as the loss payee.
Proof of income, such as pay stubs, tax returns, or bank statements.

What Happens If You Default

Pledging collateral means the lender can take it if you stop paying. The specific timeline varies, but lenders commonly wait 30 to 90 days after a missed payment before formally declaring the loan in default.⁶

Once you are in default, the lender has the right to repossess the vehicle. In many states, repossession can happen without advance notice. A recovery agent may come to your property to take the vehicle, though they cannot use physical force or break into a locked garage.⁷

After repossession, the lender sells the vehicle and applies the proceeds to what you owe. If the sale does not cover the full balance plus repossession costs, the shortfall is called a deficiency, and in most states the lender can sue for a deficiency judgment to collect it. Owe $15,000 and the vehicle sells for $8,000? You could still be on the hook for the $7,000 gap plus applicable fees.⁷

Handing the vehicle back voluntarily does not eliminate the deficiency. You remain liable for the difference between the balance and what the vehicle brings at sale.⁷

A repossession stays on your credit report for seven years from the date of the original missed payment that triggered the default. Older events carry less weight in scoring, but the mark can make borrowing harder and more expensive throughout that period.⁸

What the Lien Means While You’re Paying

When OneMain places a lien on your vehicle, you still own it and drive it. What you generally cannot do is sell it or transfer the title until the loan is paid off. The lien is what gives the lender a legal claim to the asset, and it’s what makes repossession possible if you stop paying.⁵

Once you pay the loan in full, OneMain releases the lien. You can then obtain a clear title through your state’s motor vehicle agency, which removes any record of the lender’s claim on the vehicle.

1
OneMain Financial. What Is Collateral?
2
Consumer Financial Protection Bureau. Military Lending Act (MLA)
3
Office of the Law Revision Counsel. 10 USC 987 – Terms of Consumer Credit Extended to Members and Dependents: Limitations
4
OneMain Financial. Do You Have a Car or Other Vehicle?
5
OneMain Financial. Secured vs. Unsecured Loan: What’s the Difference?
6
OneMain Financial. What Does it Mean to Default on a Loan
7
Federal Trade Commission. Vehicle Repossession
8
Experian. How Long Repossession and Voluntary Surrender Stay on a Credit Report