Can a car loan from a bank be used to buy a vehicle from a private party?

I recently got pre-approved for a car loan for $10,000. I want to save money by purchasing from a private seller. Can I use a bank loan to pay for a car from a private seller?

Answer provided by
Eric Schad
Answered on Apr 27, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
“Many banks and credit unions will offer private-party auto loans without a hitch. The process is very similar to buying a vehicle from a dealership.
Since you have pre-approval, the next step is to find the car you want. You’ll want to ask all the right questions, such as:
  • Why are you selling the vehicle?
  • Does the vehicle have any problems?
  • Can I take it to my mechanic?
  • Do you have a Carfax report?
  • Do you own the car outright?
Once you have the answers to these questions and you’re satisfied, take the VIN and other vehicle information to your lender. After reviewing the info, they’ll either approve or deny the loan.”

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