Best Private-Party Auto Loans in 2024

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7 best private-party auto loans

Written by Amanda Push | Edited by Katie Lowery | Updated August 30, 2023
How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
LendersStarting APRsLoan termsLoan amountsBest for…
Southeast Financial Credit Union logo #14.75%12-84 monthsUp to $100,000Older or high mileage cars
Navy Federal Credit Union logo #15.44%36-96 monthsFrom $250Borrowers with military ties
PenFed Credit Union logo #16.79%36-84 monthsUp to $150,000Prequalified car loans
7.49%24-72 monthsFrom $8,000Borrowers with fair credit
PNC Bank logo #18.49%12-84 months$5,000-$100,000In-person service
LightStream logo #19.24% (with autopay)24-144 months

Loan Term Disclosure

Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $25,000 loan at 7.49% APR with a term of 3 years would result in 36 monthly payments of $777.54. © 2024 Truist Financial Corporation. Truist, LightStream and the LightStream logo are service marks of Truist Financial Corporation. All other trademarks are the property of their respective owners. Lending services provided by Truist Bank.

$5,000-$100,000Unsecured auto loans
Bank of America logo #19.39%48-72 monthsFrom $7,500Borrowers who prefer large banks

Best lenders for private-party auto loans

Southeast Financial Credit Union: Best for older or high mileage cars

4.75%

Up to $100,000

12-84 months

600

Pros

  • Flexible loan terms
  • No limits on model year
  • No mileage restrictions
  • Doesn’t increase rate for private-party loans

Cons

  • Must become credit union member to close on loan
  • Branches limited to Tennessee

What to know

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Southeast Financial Credit Union doesn’t place restrictions on the model year or mileage of cars it’s willing to finance, which can be useful if you’re looking for a cheap car from an individual seller. This lender also offers short-term auto loans and doesn’t increase rates if you’re taking out a private-party car loan.

However, if you prefer in-person service, Southeast Financial Credit Union’s branches are limited to just Tennessee.

Eligibility requirements

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While Southeast Financial Credit Union doesn’t disclose its credit criteria, it does outline its membership criteria:

  • Open a Southeast Financial savings account with a $5 deposit
  •  
    AND meet one of the following conditions

  • Make a $5 donation to Autism Tennessee
  • Current or retired employee of Southeast Financial Select Employee Group
  • Close relative of a Southeast Financial Credit Union member
  • Live, work, worship, go to school or volunteer in a qualifying Tennessee or Kentucky community, Tishomingo County, Mississippi or Corinth, Mississippi
  • PenFed Credit Union: Best for prequalified car loans

    6.79%

    Up to $150,000

    36-84 months

    Not specified

    Pros

    • Borrowers can prequalify for a loan with no credit impact
    • Offers up to 125% financing
    • Large loan amounts of up to $150,000
    • No prepayment penalties for paying off your loan early

    Cons

    • Must become credit union member to close on loan
    • Unclear eligibility requirements
    • Vehicles must have fewer than 60,000 miles to qualify for 84-month loan terms

    What to know

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    PenFed Credit Union allows consumers to prequalify for a private-party auto loan, a service not all lenders provide. This means you can preview the rates you may qualify for without impacting your credit. This lender also offers up to 125% financing and loan amounts up to $150,000.

    Like all credit unions, you’ll need to become a member before you can close your loan. If you’re applying for an 84-month auto loan, your vehicle will need to have fewer than 60,000 miles and must be no older than five years.

    Eligibility requirements

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    To qualify for a PenFed auto loan, your car must have fewer than 125,000 miles on it. You’ll need to meet the lender’s credit requirements, but PenFed doesn’t specify what credit scores it looks for.

    Before you can close on the loan, you’ll also need to become a credit union member. While some credit unions have strict membership requirements, PenFed membership is open to everyone. You’ll just need to open a savings account and make a minimum deposit of $5.

    myAutoLoan: Best for borrowers with fair credit

    7.49%

    From $8,000

    24-72 months

    600

    Pros

    • Low minimum credit score requirement
    • Allows co-borrowers
    • Provides clear eligibility requirements for applicants

    Cons

    • High minimum loan amount
    • Not available to residents of Alaska or Hawaii
    • Higher rates on private-party loans

    What to know

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    myAutoLoan isn’t a direct lender — rather, it offers multiple loan options through its network of lending partners for consumers looking to buy a car. Because its minimum credit score requirement is only 600 and myAutoLoan allows for co-applicants, this company may be a good fit for consumers whose credit isn’t perfect.

    Like many lenders, myAutoLoan charges a higher APR on private-party auto loans. For example, a borrower with excellent credit may qualify for an APR as low as 6.43% on a used car purchased from a dealer, but private-party financing starts at 6.99% APR.

    In order to qualify for the lowest rates offered in myAutoLoan’s marketplace, you’ll need to have a good credit score. Residents of Alaska and Hawaii aren’t eligible for a loan on this platform.

    Eligibility requirements

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    One of the advantages of myAutoloan is that the company provides clear eligibility requirements for its future borrowers:

  • 600 minimum credit score
  • $21,600 gross annual income
  • Must not live in Alaska or Hawaii
  • Car must have fewer than 125,000 miles
  • Car must be 10 years old or newer
  • PNC Bank: Best for in-person service

    8.49%

    $5,000-$100,000

    12-84 months

    Not specified

    Pros

    • Offers a wide range of loan terms
    • Provides 0.25% autopay discount
    • Branch visit may provide a more personalized experience

    Cons

    • High rates for small loan amounts
    • Unclear eligibility requirements
    • High minimum loan amounts

    What to know

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    To get a private-party auto loan from PNC Bank, you’ll need to visit a branch in person. While some consumers may prefer to do everything online, for others, visiting a bank to apply for a loan adds the personal touch they’re looking for.

    However, PNC Bank rates for private-party auto loans can be much higher than what some other lenders charge. For example, the lowest rate on an older car that costs less than $10,000 may start as high as 15.04%. To qualify for this lender’s lowest private-party auto loan rate, you’ll need to have an excellent credit profile and be willing to finance at least $25,000.

    Eligibility requirements

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    To get a PNC Bank auto loan, you’ll need to meet this lender’s credit score, income, credit history and debt-to-income ratio criteria. However, PNC Bank doesn’t share specific details about its qualification requirements.

    LightStream: Best for unsecured auto loans

    (454)
    User Ratings & Reviews rating-reviews-tooltip-icon

    Ratings and reviews are from real consumers who have used the lending partner’s services.

    (454)
    User Ratings & Reviews rating-reviews-tooltip-icon

    Ratings and reviews are from real consumers who have used the lending partner’s services.

    9.24% with autopay

    $5,000-$100,000

    24-144 months

    Loan Term Disclosure

    Your loan terms, including APR, may differ based on loan purpose, amount, term length, and your credit profile. Excellent credit is required to qualify for lowest rates. Rate is quoted with AutoPay discount. AutoPay discount is only available prior to loan funding. Rates without AutoPay are 0.50% points higher. Subject to credit approval. Conditions and limitations apply. Advertised rates and terms are subject to change without notice. Payment example: Monthly payments for a $25,000 loan at 7.49% APR with a term of 3 years would result in 36 monthly payments of $777.54. © 2024 Truist Financial Corporation. Truist, LightStream and the LightStream logo are service marks of Truist Financial Corporation. All other trademarks are the property of their respective owners. Lending services provided by Truist Bank.

    Good to excellent credit

    Pros

    • Doesn’t charge any fees
    • Offers rate discount for signing up for autopay
    • May offer same-day funding (conditions apply)

    Cons

    • Doesn’t offer prequalification
    • Exclusive to those with good or excellent credit
    • Rates on unsecured loans may be higher than loans secured by the vehicle

    What to know

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    Unlike many auto loan lenders, LightStream offers unsecured car loans. Most auto loans are secured, meaning that your vehicle serves as collateral to guarantee repayment. A LightStream auto loan, on the other hand, is similar to a personal loan — your eligibility is based solely on your creditworthiness. Some LightStream loans may be funded the same day you apply.

    Unfortunately, LightStream doesn’t offer preapprovals, which means you’ll have to officially apply for a loan to see your rates and terms. If you have fair or bad credit, you likely won’t qualify for a private-party auto loan since LightStream only caters to those with good credit.

    Eligibility requirements

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    LightStream will only consider borrowers with good or excellent credit for auto loans. This lender also considers factors like your income, years of credit experience, value of assets and debt-to-income (DTI) ratio.

    Bank of America: Best for borrowers who prefer large banks

    9.39%

    From $7,500

    48-72 months

    Not specified

    Pros

    • Private-party auto loans available in all 50 states
    • Preferred Rewards members may receive interest rate discount
    • Rate offer is good for 30 days

    Cons

    • High minimum loan amount
    • Must be an online banking customer to qualify for a private-party loan
    • Interest rate discount only available to Preferred Rewards members

    What to know

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    As one of the largest banks in the U.S., Bank of America offers accessibility to consumers in all 50 states and the District of Columbia. If you’re a Preferred Rewards member of Bank of America, you may qualify for a 0.25% or 0.50% interest rate discount, though the bar for membership is high.

    If you’re looking to finance an inexpensive used car, you may need to look elsewhere as Bank of America only offers loans as small as $7,500. Private-party auto loans are only available to existing online banking customers, and this lender’s starting APR is higher than many other lenders on this list.

    Eligibility requirements

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    Bank of America’s minimum credit score requirement is not disclosed, but you’ll need to meet the following criteria to qualify for a private-party auto loan:

  • Be an online banking customer
  • Vehicle can’t be more than 10 years old
  • Car must have fewer than 125,000 miles
  • Car value must be at least $6,000
  • What is a private-party auto loan?

    A private-party auto loan is a type of car loan that can be used to finance a car purchase from an individual seller rather than a dealership. You can typically find these loans at banks, credit unions and online lenders. Many lenders place limitations on the age and mileage of the vehicle you’re planning to purchase if you’re taking out a loan.

    Typically, lenders charge higher rates for these used car loans since they tend to view these purchases as riskier investments. Unlike dealerships, private sellers won’t necessarily keep the car in good condition or get it inspected.

    What to know about private-party auto loans

    A private-party auto loan works a little bit differently from a traditional auto loan for a car purchased at a dealership. Here’s some details to keep in mind when considering this type of loan.

    • Choose your car before taking out a loan. As part of your private-party auto loan application, a lender will want to make sure the vehicle you’re planning to buy meets its criteria. This means you’ll have to provide information like the vehicle identification number (VIN), make, model and mileage.
    • Prepare for potentially higher auto loan rates. Because a used car from a private seller may not have a history of regular maintenance and won’t come with a warranty, lenders inflate the APRs they charge to offset their risk.
    • Avoid dealer fees but miss out on support. While buying from a private seller lets you skip unnecessary dealer fees, you’ll also miss out on the assistance dealerships can provide when buying a car. Dealerships can help you with your auto loan application as well as taking care of your sales tax. On a private party sale, you’ll have to submit your sales tax to the appropriate state agency yourself.
    • Pay off any existing liens on the car. If there is an existing loan on the car you want to buy, this can complicate the sale. The seller will generally be responsible for handling the loan payoff and clearing the lien from the vehicle title, but this may add time to the process.
    • Provide the vehicle documentation to your lender. This may include documents such as the title, registration, paperwork on any current liens on the car, the bill of sale and the VIN.
    • Manage the title transfer yourself. Your lender may help you with this part of the process, but you’ll ultimately be responsible for getting the title transferred. Be sure to avoid buying a car without a title.

    How to get a private-party auto loan

    If you’re applying for a private-party auto loan, you’ll need to choose the vehicle you’re going to buy before getting your loan. Here’s what you need to know about the process:

     Determine your price range

    Check your credit score and use an auto loan calculator to figure out what you can afford. Be sure to budget for expenses like auto insurance, registration and maintenance so you know that your monthly payment won’t strain your wallet.

     Choose your car

    With your budget in mind, you can begin your car search. Whether you’re buying a car on Craigslist or thumbing through used car websites, remember to ask for a vehicle history report to learn about the car’s history. If you find a car you like, take it for a used car inspection to be sure the vehicle is running properly and won’t require hefty repairs.

     Shop around for loans

    After negotiating the car’s price, apply to a few lenders. Private-party auto loan rates tend to have higher rates than vehicles bought from a dealership, which makes it even more important to secure the lowest rate you qualify for. When you fill out an application, you’ll need the following information:

    • The car’s year, make, model, vehicle identification number (VIN) and mileage
    • Your name, address, Social Security number, contact details, employment information and income
    • Your desired loan amount and repayment term

     Close on your auto loan

    Choose your best private-party auto loan offer and follow through with the paperwork. Your lender can help you finalize the loan and get the money to the seller. Once you’ve paid for your car, you’ll need to transfer the car title.

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    How to qualify for a private-party auto loan

    To qualify as a borrower for a private-party car loan, you typically need to meet a lender’s debt-to-income ratio and credit score requirements. Before submitting an application, check your credit score and credit reports to see which lenders you may qualify with.

    While some lenders don’t provide their requirements upfront, you can check your potential eligibility by seeing if you prequalify for a car loan. This will allow you to see the potential APRs, terms and amounts a lender may be willing to offer.

    Are there private-party auto loans for bad credit?

    Even if your credit score needs work, you can find lenders that offer car loans for bad credit.

    As with all bad credit loans, you’ll face higher interest rates than borrowers with the strongest credit would. If you have the time to spare, working to improve your credit score before you apply can result in savings. You won’t go from subprime to super-prime in just a few months, but you might move into the approvable range and shave off a bit of your interest rate.

    In some instances, you may not be able to get an auto loan for your car purchase. For instance, if the vehicle has high mileage, has a salvage title or costs less than the lender’s minimum loan amount, it may not be eligible for financing. Instead, consider these alternatives to cover your car expenses:

     Take out a personal loan

    Personal loans can be used to buy a car because lenders are typically flexible in how loan funds are used. Personal loans are also typically unsecured, meaning you won’t have to use your car as collateral, but interest rates tend to be higher. Like auto loans, personal loans come in lump sums and have fixed interest rates.

     Lease a car

    If you can’t afford to buy a car, you may consider leasing a car instead. The monthly lease payments are likely to be less expensive than a loan payment, but you won’t own the car at the end of the lease. If you decide you want to keep the car, you can get a lease buyout loan to purchase the vehicle at the end of the lease term.

     Pay in cash

    It can take time to save enough money to buy a car with cash, but this strategy can save you money on interest in fees. This may be a good option for consumers with bad credit.

    How we chose our picks for best private-party auto loans

    We examined more than 30 auto lenders that offer private-party auto loans at competitive rates to select the top seven lenders. We considered the following criteria:

    • Accessibility: We chose lenders with auto loans that are available to more people and require fewer conditions. This may include lower credit requirements, wider geographic availability, faster funding and easier and more transparent prequalification, preapproval and application processes.
    • Rates and terms: We prioritize lenders with more competitive starting fixed rates, fewer fees and greater options for repayment terms, loan amounts and APR discounts.
    • Repayment experience: For starters, we consider each lender’s reputation and business practices. We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide any unique perks to customers, like free wealth coaching.