Buying a new car can be an exciting yet stressful experience. While you work to find the right car, you also have to figure out how to save for a down payment and finance your new wheels.
While the reason for buying a car might seem obvious, some people see the need for a car differently. For example, you plan to open a small business as a locksmith, having a reliable car to get you to your customers is a top priority. Another person may want a particular car because of the nostalgic memories attached to it. Everyone’s reasons are different.
Since not all cars or owners are alike, there are different ways to finance a new car and one way may be with a personal loan. Using a personal loan to buy a car is a good option for those who may not qualify for a typical car loan and are looked for an unsecured loan, meaning you do not have to put up collateral. It is estimated that about 4 percent of personal loans are used for vehicle purchases.
Another reason to take into consideration using a personal loan to buy a car is because some lenders will not finance a car that is more than seven years old. This can be an issue if you’re looking into a used car, or one that you admired when you were younger.
If you’re looking for fix-me-up kind of car a personal loan might also work as these cars tend to be much lower in cost than a typical used car and may not need to be financed.
Lastly, if you own a car and need car repair then a personal loan could be what you need to fix costly issues like replacing a transmission or a new engine. Fixing these repairs may also help you get more for our car whenever you decide to sell it or trade it in for a newer model.