How to get an unsecured car loan | finder.com

How to get an unsecured car loan

We value our editorial independence, basing our comparison results, content and reviews on objective analysis without bias. But we may receive compensation when you click links on our site. Learn more about how we make money from our partners.

Find financing that isn’t tied to your vehicle’s price tag.

With an unsecured car loan you won’t risk losing your car and often can borrow more than the car’s value to cover other costs like registration. But they can be hard to find and you’ll need good credit to qualify.

How do unsecured car loans work?

An unsecured car loan works like a personal loan: You don’t have to put up any collateral and therefore can borrow more than the value of your vehicle. You can borrow more to cover insurance, additional costs or anything you need.

However, unsecured loans You may also be subject to stricter eligibility criteria, like good credit, but your car likely won’t need to meet any criteria.

Compare unsecured car loans

Many auto lenders provide secured car loans only. You may want to click over to the “Personal loans” tab for unsecured loan options that don’t require collateral.

Rates last updated December 17th, 2018

Reveal your potential loan offers and rates

Answer two quick questions to filter the loan offers and get the best one for you.

Select your credit score range

I don't know my credit score

Finally, select where you live.

To get your credit score:

Experian logo

Experian is a leading provider of personal and business credit reporting. Find out your FICO score now for less than the cost of a cup of coffee.

Unfortunately, none of the personal loan providers offer loans for that credit score. If you are in urgent need of a small loan, you might want to consider a short term loan.
Name Product Product Description Min. Credit Score Term of Loan Requirements
car.Loan.com Car Loans
Apply with a simple online application to get paired with a local auto lender. No credit and bad credit accepted.
300
Varies by lender
Must be a US citizen with a current US address and employed full-time or have guaranteed fixed income.
Auto Credit Express Car Loans
Get connected with an auto lender near you, even if you have bad credit.
300
Typically 3 to 6 years
Must be employed full-time or have guaranteed fixed income of at least $1,500/month and be a current resident of the US or Canada.
LightStream Auto Loans
Quick car loans from $5,000 to $100,000 with competitive rates for borrowers with strong credit.
Good to excellent credit
Flexible terms
Good or excellent credit, enough income or assets to afford a new loan, US citizen or permanent resident, 18+ years old
RateGenius Auto Loan Refinance
Connect with a network of over 150 lenders to refinance your car loan.
510
Varies
Income of $2,000+/month, vehicle has less than 150,000 miles and is no older than 8 years, loan balance is between $10,000 and $100,000, debt-to-income ratio is less than 50%
LendingClub Auto Refinancing
Lower your monthly car payments and save on interest through a fast and easy online application process.
Fair or better credit
Minimum of 2 years
Car must be less than 10 years old with fewer than 120,000 miles. Current loan must have a balance between $5,000 and $55,000 and at least 24 months left in its term.
MotoRefi Car Loan Refinancing
A car loan connection service for borrowers looking to refinance.
525
1–6 years
Must have an income of at least $2,000/month and have a vehicle with less than 100,000 miles.
LendingTree Auto Loans
Compare multiple financing options for auto refinance, new car purchase, used car purchase and lease buy out.
Good to excellent credit
Typically 1 to 7 years
Must be a US citizen and 18+ years old. Must have good to excellent credit.

Compare up to 4 providers

Most personal loan lenders don’t require collateral. Some even offer specialized loans for car purchases.

Rates last updated December 17th, 2018

Reveal your potential loan offers and rates

Answer two quick questions to filter the loan offers and get the best one for you.

Select your credit score range

I don't know my credit score

Finally, select where you live.

To get your credit score:

Experian logo

Experian is a leading provider of personal and business credit reporting. Find out your FICO score now for less than the cost of a cup of coffee.

Unfortunately, none of the personal loan providers offer loans for that credit score. If you are in urgent need of a small loan, you might want to consider a short term loan.
Name Product Product Description Min. Credit Score Max. Loan Amount APR
Even Financial Personal Loans
Get connected to competitive loan offers instantly from top online consumer lenders.
550
$100,000
3.84% to 35.99% (fixed)
Credible Personal Loans
Get personalized rates in minutes and then choose a loan offer from several top online lenders.
Good to excellent credit
$100,000
4.99% to 36% (fixed)
LendingClub Personal Loan
A peer-to-peer lender offering fair rates based on your credit score.
660
$40,000
6.95% to 35.89% (fixed)
Monevo Personal Loans
Quickly compare multiple online lenders with competitive rates depending on your credit.
550
$100,000
3.34% to 35.99% (fixed)
NetCredit Personal Loan
Check eligibility in minutes and get a personalized quote without affecting your credit score.
550
$10,000
34% to 155% (Varies by state) (fixed)
SoFi Personal Loan Fixed Rate (with Autopay)
No fees. Multiple member perks such as community events and career coaching.
680
$100,000
7.24% to 15.24% (fixed)
Marcus by Goldman Sachs Personal Loans
Consolidate your debt or pay off large expenses with competitive rates and no fees.
Good to excellent credit
$40,000
6.99% to 24.99% (fixed)
OneMain Financial Personal and Auto Loans
An established online and in-store lender with quick turnaround times. Poor credit is OK.
Varies
$30,000
16.05%–35.99%* (fixed)
Avant
Conveniently check your loan options without affecting your credit score.
580
$35,000
9.95% to 35.99% (fixed)

Compare up to 4 providers

Three factors to compare on unsecured car loans

The most important part of picking a lender is comparing the loans you’re offered. Here are some quick tips to help you focus your decision:

  • Check out the interest rate. Every loan offers a unique interest rate. Even if you have the best credit and a superb history, you may not be eligible for the lowest rates from certain lenders, so save yourself time and frustration by looking for preapproval to compare rates.
  • Consider the fees. Does your lender have an origination fee? A prepayment fee? These stack up and add to the total cost of your loan. Find a lender with minimal fees to avoid being nickle-and-dimed before you even set foot in a dealership.
  • Find the APR. The APR is the final cost of the loan. It includes the principal, interest and all the fees. By comparing the APR of different lenders, you’ll see how much one loan could cost you compared to another.

The benefits and drawbacks of an unsecured car loan

  • You don’t need to provide collateral against your loan, which means the application process is generally faster.
  • The loan amount is more flexible because you can use it however you like, including combining uses. For instance, you could take out a larger loan to cover debt consolidation and to finance your car.
  • The lender can choose to take your case to court if you default on your repayments.
  • The interest rates almost always are higher than secured car loans because there is more risk for the lender.
  • Because the loan has a higher risk, you may have to borrow a smaller amount than with a secured loan.

Be cautious of overborrowing

If you borrow more than the cost of your car, be careful not to apply for more than you can afford. Work out a budget to ensure you will be able to afford your repayments. These loans tend to come with higher rates than secured car loans, so take this into account when submitting an application.

Should I buy any dealer extras?

When you have an unsecured car loan, you can use your funds to purchase more than just the car. Dealer extras can be a good deal if you know what you’re getting and what you want to avoid. However, it’s often not worth it since you can often get the same service elsewhere for cheaper — if it’s even necessary at all.

You might want to avoid these dealer add-ons

Here is a list of common dealer extras and when you might not want to go for them.

  • Rustproofing. It may not be worth getting this done at the dealer unless you’re buying a used car. This is because many modern manufacturers will seal the car against wax and keep in under warranty for five to ten years.
  • Fabric protection. Generally not worth it. You can buy fabric protector and do the job yourself for much cheaper than the dealer’s price.
  • Paint protection. Much like fabric protection, you can do this yourself with a can of wax or have it done later for much less than what a dealer is offering.
  • Extended warranty. New cars usually come with a manufacturer warranty, but if you’re buying a used car, opting for an extended dealer warranty can cover any unexpected expenses after your purchase.
  • Prepaid maintenance plans. This depends on the car you’re buying. If you’re picking up a clunker or a car with an incomplete owner history, a prepaid maintenance plan may be worth the money. Otherwise, you might want to skip it.
  • Extra tinting. Most cars come with some tinting, and it’s usually cheaper to have extra tinting done elsewhere.
  • Extra insurance. Most policies, like GAP insurance, that are sold by dealers are usually unnecessary. Unless you’re prepared to pay a premium price for just in case, you may want to skip extra insurance.
  • Headlight protectors and towbars. If you know the dealer is offering a good deal, go for it. Otherwise, it’s likely to have them installed aftermarket.
  • Nitrogen inflation. Nitrogen inflation does have performance benefits, but you’re unlikely to notice. If you really want it, you can save money by having it done somewhere else.

Bottom line

An unsecured car loan can be a quick way to finance your next vehicle, but it comes with its own risks that you’ll need to understand before you borrow. Compare your rates and read up on personal loans so you can make the most informed decision.

If you’re interested in a traditional auto loan secured by your vehicle purchase, you can visit our page on secured car loans compare lenders.

Frequently asked questions

Image source: Shutterstock

Kellye Guinan

Kellye Guinan is a writer and editor with finder.com and has years of experience in academic writing and research. Between her passion for books and her love of language, she works on creating stories and volunteering her time on worthy causes. She lives in the woods and likes to find new bug friends in between reading just a little too much nonfiction.

Was this content helpful to you? No  Yes

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder.com provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on finder.com are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site