Can I use a personal loan to buy a car?
Yes, but auto loans almost always cost less. Auto loans are secured by the car itself, so APRs run 3-8 percentage points lower than unsecured personal loans at the same credit tier. Personal loans for vehicles make sense mainly when buying an older car or from a private seller where auto loans aren't available.
Context
Standard auto financing pricing: prime credit (740+) sees auto-loan APRs of 5-7%, while personal loans at the same credit tier run 8-12%. The spread compounds over the loan's life; a $25,000 vehicle financed over 60 months can cost $3,000-$5,000 more interest via personal loan than via auto loan.
When a personal loan makes sense: vehicle older than most auto-loan lenders' age cutoff (typically 8-10 years), private-party purchase where the seller wants cash rather than a financing contract, or buying a vehicle that doesn't meet auto-loan condition requirements.
For a new or used car from a dealer, financing through the dealer or your own bank/credit union nearly always beats a personal loan on cost.
- Reviewed by
- Compliance Review
- Last reviewed
- May 22, 2026
Ready to compare real personal-loan offers?
Two minutes. Soft credit check only.
Begin a request