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Is it possible to use a personal loan to buy a car?
I want to use a personal loan to buy my car because I don’t have money for a downpayment right now. Is this an option, or do I have to use a car loan?
Liz Jenson · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Yes, you can use a personal loan to buy a car! There are several advantages to taking out a personal loan instead of a car loan.
You’re right that you won’t need to make a downpayment on a personal loan. You also won’t have a high risk of repossession as you would with a car loan since personal loans won’t require
a lien
on your car.That said, it might be more expensive in the long run. Personal loans tend to come with a high APR, which means you might pay thousands of dollars more for your car by using a personal loan. It can also be more difficult to qualify for a personal loan since they typically require excellent credit.
If you’re interested in getting a personal loan, shop around with various lenders. Doing so will give you a good idea of what you’re eligible for and the interest rates you’d receive.
Regardless of how you decide to purchase your car, you’ll need to get an insurance policy for it. The
Jerry
app makes it quick and easy to find the best rates available on the insurance coverage you want! Just download the app and answer a few questions to see a comprehensive cross-analysis of the best car insurance policies for you and your new vehicle.View full answer
- Gregory R.
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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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