What Is a Private Party Auto Loan?
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Private Party Auto Loan Defined
Where to Find a Private Party Auto Loan
Private Party Auto Loans vs Typical Auto Loans
Factors Affecting the Interest Rate of a Private Auto Loan
Your credit score Your income and employment history The age of the vehicle The mileage of the vehicle The length of the term
Pros and Cons of Private Party Auto Loans
Advantages of Private Party Auto Loans
They provide would-be car buyers with private sale auto loan financing Can help you buy a used car at a bargain price Your interest rate may be lower than unsecured personal loan rates Can help you build credit
Disadvantages of Private Party Auto Loans
Lenders may require that you find the car you want to buy before applying for the private sale auto loan Your interest rate may be higher than a typical auto loan An auto loan for private seller purchases cannot be used to buy a new car from a dealer The lender may not help you in the paperwork process of transferring the car title and registration into your name
How to Qualify for a Private Party Auto Loan
How to Apply for Private Party Auto Loans
Name Date of birth Address Social Security number
Make and model Year Mileage Vehicle identification number (VIN)
The bill of sale or buyer’s order detailing the terms of the purchase agreement A copy of the vehicle’s title and registration Written payoff quote from the seller’s lender, if the car is still under lien on their side
Should You Use a Private Party Auto Loan to Refinance Your Car?
Are There Private Party Auto Loans for Bad Credit?
Alternatives to Private Party Auto Loans
Indirect financing through a dealership Borrowing money from friends or family to buy a car Using a personal loan to buy a car Buying the vehicle outright with cash Getting a short-term car lease
The Takeaway
Frequently Asked Questions
Photo credit: iStock/krisanapong detraphiphat
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About the Author
Jamie Cattanach is a full-time freelance writer whose work has been featured at CNBC, Yahoo Finance, The Motley Fool, the Huffington Post and other outlets. At SoFi, she writes about investing, retirement, student loans and how to get your money right -- no matter what that means for you.
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