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How do I get a personal loan for a used car?
I need to get a personal loan for a used car, but I’m not sure how to do it. I found a car that I really want, but it’s a private sale so I need to get the money without a car loan.
Liz Jenson · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Luckily, you can get a personal loan for a used car from a private seller! Here’s what you’ll need to do:
- Shop around. Try to find the loan with the best terms and interest rates before settling on a lender. Looking at multiple lenders, like banks or credit unions, can improve your chances of finding the best loan.
- Apply for the loan. Once you’ve found a lender you like, you’ll need to apply for the loan. Lenders require documents that show proof of identity, proof of income, and proof of address.
- Use the money to purchase the car. Once you’re approved and receive the money, sign the check over to the seller of your car. They’ll thentransfer the titleinto your name.
- Pay off your loan. After you’ve bought your car, you’ll need to continue making payments for the length of your term.
That said, personal loans require a very good credit score and often carry an even higher interest rate than car loans do. Over time, you’ll likely pay a lot more for your car with a personal loan than with a car loan.
Another option to consider is private-party car loan. Private-party loans use your car as collateral, so you’ll usually be able to secure a lower interest rate than you would on a personal loan. Large banks like PNC, some credit unions, and some online lenders typically offer them.
Regardless of which loan you decide to use, you’ll still need an affordable insurance policy. Luckily,
Jerry
can help you compare personalized quotes from over 50 top providers like Progressive and Nationwide for free. Jerry will even send you new quotes before your policy renews, so you always know you’re getting the best rate.View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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