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Personal loans can buy a car. Here is when that actually makes sense.

9/17/2026

Borrowing money without pledging the car as security is possible when you use a personal loan instead of a traditional auto loan, and for some buyers it is the better path.

An unsecured loan, which is what most personal loans are, means a lender cannot repossess the vehicle if you fall behind on payments. The trade-off is usually a higher interest rate.

The short version: auto loans are cheaper on paper but harder to get on older vehicles and thin credit. Personal loans cost more on average but come with fewer restrictions on what you can buy.

When the car itself blocks conventional financing Some lenders will not finance a vehicle older than ten years, and many cap eligibility at 100,000 miles.