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  • Writer's picturePreston Morris

Unsecured Auto Loan Rates

Updated: Sep 8, 2022

Looking For an Auto Loan?

CLICK Here For Instant Auto Loan Application!

While you're reviewing your financing options for your new , you may be wondering, “What is an unsecured car loan?” Unsecured auto loans are loans in which the car is not considered collateral. ... Don't let a poor credit history deter you from seeking an auto loan.

This type of financing might seem too good to be true, but it is possible if you’re able to qualify.

Benefits of an unsecured auto loan include:

No need to rely on dealership financing

One benefit of an unsecured auto loan is that you don’t have to get financing through your dealership’s finance department.

You can get your auto loan from any lender, which includes your personal bank, credit union, as well as online lenders. Being able to shop for your own financing also means that you’re not stuck to a dealer’s finance terms. You can compare rates and then choose the loan with the most affordable terms.

Receive a check for the purchase

When you apply for an unsecured auto loan, the bank issuing financing will give you a check for the full loan amount. You’ll then use these funds to pay for the automobile.

Because you’re paying for the automobile in this manner, you’ll own the car outright after paying the dealership and receive the title to the car.

Not limited to borrowing the value of the car

Another benefit of an unsecured auto loan is that the loan amount isn’t limited to the value of the car. There’s also the option of borrowing more than what you’ll actually pay for the car.

Of course, you should only borrow what you can afford.

If you can borrow more, use excess funds for other useful purposes. This might include covering any vehicle repair costs if you’re purchasing a used car. Or maybe use the surplus to consolidate debt and pay off a high interest credit card balance.

Car isn’t at risk of repossession

Another attractive feature is that the vehicle isn’t at risk of repossession if you default on the loan. Remember, the car doesn’t serve as collateral.

So if you stop making your loan payments, you don’t have to worry about the bank repossessing your automobile.

Looking For an Auto Loan?

CLICK Here For Instant Auto Loan Application!

Determining Loan Value

We uses the NADA guide to determine loan values. Please be aware that auto dealers may use the Kelly Blue Book for trade-in values, which will often be less than NADA.

Types of vehicles and the amount financed will usually include applicable rebates, taxes, titling fees, and warranty:

  • New cars, passenger trucks, and motorcycles - up to 120% NADA Retail Value or 100% of Manufacturer's Suggested Retail Price (MSRP) Value

  • Used cars, passenger trucks, and motorcycles - up to 120% NADA Retail Value.

  • RVs and Campers - up to 105% financing (new or used)

Note: When we cannot obtain a Retail Value, up to 100% of MSRP will be financed. This applies to autos, RVs, and campers.

Loan interest rates are based on the evaluation of your credit performance and that of any co-applicant or co-maker. All loans are subject to credit approval.

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