Unsecured personal car loan
Updated: Sep 8, 2022
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Can you have an unsecured auto loan?
An unsecured car loan is a personal loan that is used to purchase a new or used car. Since the loan is unsecured, if you stop making payments, the lender cannot repossess your car.
Can a personal loan be unsecured?
An unsecured personal loan is a loan from an online lender, bank or credit union that doesn't require collateral to guarantee the loan. What is an example of an unsecured personal loan? Unsecured personal loans can be used for almost anything.
Apply for – and close – your loan
When you’ve found the car you want and you’re ready to apply for a loan, come prepared with the information and documentation you may be asked to provide:
Your full name, date of birth, address and Social Security number
Employment and income details
A copy of the vehicle registration
A copy of the front and back of the vehicle title
A bill of sale with details about the agreed-upon purchase
A written 10-day payoff quote from the seller’s lender (if the vehicle currently has a lien)
If you’re approved, you’ll get the final details on the loan and you’ll be ready to close. The lender will make out checks to the seller and/or lienholder and you can hand them over. You’ll still need to transfer the title and registration into your name and place your lender as lienholder on the title; you may want to check with your local Department of Motor Vehicles (DMV) for the details.
Looking For an Auto Loan?
CLICK Here For Instant Auto Loan Application!
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.