From Yahoo Finance · · 1m 40s
Personal Loans for Car Purchases
Personal loans can buy cars when auto loans aren't available.
In brief
Personal loans can buy cars when auto loans aren't available. You can use a personal loan to finance a used car if conventional financing isn't available or if you can't qualify for an auto loan. Originally reported by Yahoo Finance.
Quick answers
- Can you use a personal loan to buy a car?
- You can use a personal loan to finance a used car if conventional financing isn't available or if you can't qualify for an auto loan.
- What is the key takeaway from Personal Loans for Car Purchases?
- You can use a personal loan to finance a used car if conventional financing isn't available or if you can't qualify for an auto loan.
Can you use a personal loan to buy a car?
You can use a personal loan to finance a used car if conventional financing isn't available or if you can't qualify for an auto loan.
Personal loans for car purchases
Rates can be higher and repayment terms shorter, compared to traditional auto loans.
Avoid repossession with personal loans
You may be able to avoid repossession of your vehicle if you default on a personal loan.
Conventional financing not available
If you are considering buying an older car, it may not always be possible to secure a conventional loan with competitive auto loan rates.
Credit too low for auto loan
If you have less-than-ideal credit, getting a car loan may be difficult, though some lenders offer bad credit personal loans.
Subprime lender options
A second-chance auto loan, or subprime loan, is another option but often comes with higher monthly payments.
Interest rates comparison
The average interest rate for used cars was 19.10% in the second quarter of 2026, according to data from Experian.
Personal loan pros and cons
Personal loans do not require a down payment, while many auto loans do.
Bottom line
When buying a used car, a personal loan can sometimes be more favorable than a traditional auto loan.
The key point
You can use a personal loan to finance a used car if conventional financing isn't available or if you can't qualify for an auto loan.
