Can You Get a Loan To Buy a Used Car?
Purchasing a used vehicle is often an effective way to save money. But you may not have enough cash to fund a used vehicle purchase outright. If you're wondering, "Can I get a loan to buy a used car?" the answer is generally yes, but it depends on your credit history and overall financial situation. Speaking with a financial dealer at Edge Financial Services can help you determine your eligibility for funding and explore your options.
Methods of Securing a Loan for a Used Car
You may be able to secure a loan for a used car through several means. Researching your options before you head to the dealership gives you a better understanding of your buying power and the price range that makes sense for your budget.
Speak With the Dealer
Dealerships often provide financing for used vehicles the same way they do for new vehicle purchases. If you have a dealer in mind that you are planning to work with, reach out to them to ask about their financing options for used vehicles.
In some cases, a dealer will only offer financing for vehicles that meet a certain cost threshold. If you are purchasing an older car for a few thousand dollars, your purchase might not meet that threshold. Still, it doesn't hurt to ask about the dealer's options, as securing financing through the dealership is often the most convenient and accessible way to get an auto loan.
Talk to Your Bank or Credit Union
If your dealer doesn't offer used car financing or you simply want to explore other options, speaking with your bank or credit union may be a wise next step. These financial institutions typically offer personal loans and designated auto loans to customers, and they can advise you about which options you might qualify for. The main difference between car loans vs. personal loans is that car loans are secured by your vehicle, while personal loans may not have collateral, potentially leading to higher interest rates.
Your eligibility for financing generally depends on your credit score and overall credit history. Your bank may also want information about your current assets and income to determine your ability to make monthly payments. Often, the higher your credit score and assets, the lower the interest rates you might qualify for.
Shop Around With Third-Party Lenders
If you aren't eligible for financing through your bank, you may need to look elsewhere for a loan to buy a used car. Shopping around online with third-party lenders and in lending marketplaces might give you access to more loan options.
You can find both auto loans and more general personal loans across a range of lenders online. Many lenders offer financing specifically for borrowers with poor credit, but interest rates tend to be higher than they would be otherwise.
If a low credit score is preventing you from gaining access to reasonable financing rates, you may want to take steps to improve your credit before shopping for a used vehicle. Focus on making existing loan and bill payments on time, paying down debt, and keeping credit balances low. Over time, your credit score should increase, improving your loan approval opportunities.
Edge Financial Services LLC Helps Car Buyers Qualify for Dealer Financing
Can you get a loan to buy a used car? You may be able to, depending on your credit score and financial history. You also need to know where to look for a loan that meets you where you are.
Buying even a low-cost used vehicle may feel impossible if your credit is less than ideal. With Edge Financial Services LLC, buyers gain a second chance to finance a vehicle through an auto lender. We work specifically with customers who have less-than-perfect credit, expanding financing opportunities for lenders.
To learn more about our lending options and eligibility criteria, please contact us today.
