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Can a personal loan be used for a car?
I really need a car for work, but I’m also low on cash in other areas. I was already thinking about taking out a personal loan, but I don’t know if that would work for getting a car. Could I use a personal loan to buy a car?
Liz Jenson · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
In short, the answer is yes—you can use a personal loan to buy a car. But you should weigh the pros and cons and consider your other options before you do.
When you buy a car with a personal loan:
- You may not need to provide a downpayment.
- You’ll have the freedom to choose any car you want.
That being said:
- It might be harder to get a loan if your credit is bad.
Alternatively, car loans usually come with lower APRs, and you won’t need amazing credit to qualify. However, your car will serve as collateral on your loan, and you’ll only be able to choose a car that meets your lender’s conditions.
Regardless of what loan you choose, you’ll be fine as long as you keep up with your monthly payments. Remember, you’ll also need a new insurance policy once you buy a car.
To make sure you’re getting the best rate on the coverage you need, try
Jerry
. A licensed broker, the Jerry app 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 deal!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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