Yes, you can. In fact, a personal loan may offer a few extra conveniences you won’t get with a car loan. However, the interest rates may be higher, along with a few other differences, so compare the pros and cons carefully before you apply.
| Personal loan | Amount | Interest rate | Loan term | Basic requirements | ||
|---|---|---|---|---|---|---|
 | Loans Canada Personal Loan | $300 – $50,000 | 6.99% - 46.96% | 3 - 60 months |
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 | Spring Financial Personal Loan | $500 – $35,000 | 10.8% – 46.99% | 6 - 60 months |
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 | SkyCap Financial Personal Loan | $500 – $10,000 | 12.99% – 39.99% | 9 - 36 months |
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 | Loanz Personal Loan | $1,000 – $15,000 | 29.9% – 46.9% | 12 - 60 months |
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 | LoanConnect Personal Loan | $500 – $50,000 | 8.99% - 46.96% | 3 - 120 months |
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 | Mogo Personal Loan | $500 – $35,000 | 9.9% – 46.96% | 6 - 60 months |
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 | Fairstone Secured Personal Loan | $5,000 – $50,000 | 19.99% – 24.49% | 36 - 120 months |
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While a car loan may be better in certain situations, personal loans offer a range of benefits to those looking to finance a vehicle.
Choosing a personal loan to buy a car has downsides as well. Here are some of the drawbacks to consider:
Here are 3 situations where it might make sense to use a personal loan to buy a car instead of a typical car loan.
It may be better to get a regular car loan or dealership financing when you’re thinking about buying from a manufacturer or car dealership. You’ll be able to get a competitive rate and may have access to more convenient features with dealership financing.
Personal loans work in a very similar way to car loans, although they have a few notable differences:
You can apply for a personal loan for much more than the value of the car – typically up to $50,000 – with personal loan lenders. You don’t need to supply the vehicle details to your lender, just what you plan to do with the funds.
Once you’ve received the personal loan amount you can use it for the car and however else you see fit. This can be especially useful if you need to pay for taxes and title or registration fees, or if you don’t have a large down payment saved up.
With a personal loan, you get your funds before you purchase the vehicle, which means that you’re responsible for paying for the vehicle yourself. You basically use the loan money like cash — simply use the loan deposit in your bank account to pay for your car purchase. Car loans, on the other hand, typically go directly to the dealership.
You have the option of applying for a personal loan with or without collateral – though you won’t be able to back it with your car. Standard secured personal loans typically require specific types of collateral like your home, certain assets or investments. If you can get a secured personal loan to buy your car, you could potentially get an interest rate as low as 6.99%.
Compare personal loans to buy a car now
Like all loans, personal loans will charge interest and fees. Before you apply for one, consider these factors when comparing your loan options:
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There are a variety of lenders out there, and many of these offer personal loans that you can use to buy a car. Here are some of our top suggestions:
Answering the following questions can help you decide if using a personal loan instead of a standard car loan to buy a car makes sense for your specific situation and needs:
Finding the right financing option comes down to costs, features and flexibility. Car loans can be great for borrowers who want to buy from the dealership. Personal loans tend to work better for those with good to excellent credit, who want to get an older used car or buy from an unconventional seller. They could be best for borrowers who’ve bought a car a before and know what else they’ll need to purchase on top of the car itself.
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