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Best Private Party Car Loans

Not all lenders offer private-party auto loans, but you can still find a good rate

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When buying a car from a private party instead of a dealership, you won't be able to rely on the dealer to arrange financing on your behalf. Fortunately, although not all lenders offer private party car loans, they’re still widely available if you take the time to look.

Depending on your situation and needs, here are our top choices for the best private seller auto loans, based on rates, fees, vehicle requirements, and other important factors.

Best Private Party Car Loans of 2023

Still considering if you should buy from a dealership? See a wider selection of lenders with our picks for the best overall auto loans.

Best Private Party Car Loans
Best Private Party Car Loans

Best for Old Cars : PenFed

PenFed logo
PenFed logo.
  • APR Range: 6.49%–17.99%
  • Loan Amounts: $500–$150,000
  • Loan Terms: 3–7 years
Pros & Cons
  • No maximum age limitation

  • Wide range of loan amounts

  • Pre-qualification with no impact on your credit score

  • Must become a PenFed member (but this is easy)

  • Longest term only available for newer models

Why We Chose It

Many auto lenders require used vehicles to be 10 years old or newer (based on Investopedia research), making it difficult for prospective buyers on a budget to get the financing they need. In addition to not having a maximum age, PenFed also offers auto loans as low as $500, providing a lot of flexibility. You can get a loan worth up to $150,000, and the lender's maximum loan-to-value ratio (LTV) is 125%.

PenFed doesn't disclose a minimum credit score, but you can get pre-qualified and view potential rates with just a soft credit check. The lender's minimum APR is competitive, and the maximum is relatively low. If you can't get approved on your own, you can apply with a co-signer.

Repayment options are a bit strict compared to other lenders, which may allow terms as short as one year. PenFed’s terms start at 36 months, and the longest term—84 months—is reserved for relatively new used cars, with model years as new or newer than the current year minus five years, and less than 60,000 miles.

Borrower Qualifications
  • Loans are available in all 50 states, District of Columbia, and select U.S. territories.
  • Does not disclose a minimum credit score
  • Borrower must join PenFed Credit Union, which requires a $5 deposit into a PenFed savings account.
Vehicle Qualifications
  • Maximum loan-to-value ratio (LTV): 125% (110% in Puerto Rico and the U.S. Virgin Islands).
  • Maximum vehicle age: None
  • Maximum vehicle mileage: 125,000 miles
  • Maximum age and mileage for an 84-month term: 5 years and 60,000 miles

Best for Low Used APR and Bad Credit : AUTOPAY



  • APR Range: 2.99% and up
  • Loan Amounts: $2,500–$100,000
  • Loan Terms: 2–8 years
Pros & Cons
  • Works with multiple lenders to expand borrowing opportunities

  • Pre-qualification with no impact to your credit score

  • Allows co-signers

  • Doesn't disclose maximum APR

  • Unclear eligibility requirements

Why We Chose It

As an auto loan marketplace, AUTOPAY offers loans to borrowers across the credit spectrum. Its loans aren't just for bad credit, however—borrowers with excellent credit could qualify for rock-bottom interest rates. 

AUTOPAY doesn't disclose a maximum APR, but you can get pre-qualified with a soft credit check to view your potential offers. You can also add a co-signer if you can't get approved on your own or don't like the rate you see.?

Depending on your needs, AUTOPAY offers a wide range of loan amounts and terms, but its minimum loan amount may be too high for some buyers. It's also unclear about other eligibility criteria, making it difficult to know if you and the vehicle you're eyeing are eligible.

Borrower Qualifications
  • Loans are available in all 50 states, the District of Columbia, and Puerto Rico.
  • Minimum credit score of 500 (according to customer support)
  • MInimum monthly income of $2,500 (according to customer support)
Vehicle Qualifications
  • Maximum vehicle mileage: 150,000 miles
  • Maximum vehicle age: 10 years

Best for High Maximum Accepted Mileage : LightStream



  • APR Range: 9.49%–25.49%* with autopay
  • Loan Amounts: $5,000–$100,000
  • Loan Terms: 3–7 years
Pros & Cons
  • No age or mileage restrictions

  • Loan is unsecured

  • Same-day funding for some borrowers

  • High minimum APR

  • High minimum loan amount

  • Not?pre-qualification option

Why We Chose It

LightStream is fairly unique among auto lenders in that it doesn't require you to use the vehicle you're buying as collateral (you’re getting a typical personal loan). As a result, you don't have to worry about age or mileage restrictions, an appraisal, or a potential repossession. And depending on when you apply, you could get funding as soon as the same day.

Because LightStream's loans are unsecured, however, the interest rate can be high, even if you have stellar credit. LightStream’s rates for private party auto loans are higher than for some other loan types. Also, the minimum loan amount is much higher than some of the other lenders on our list. A 0.50% interest rate discount is available if you sign up for automatic payments, and LightStream offers to beat other lender offers by 0.10%, but only down to its lowest APR available.

What's more, LightStream’s minimum recommended credit score is fairly high at 660, according to customer support, and there's no pre-qualification option; that means you'll need to undergo a hard credit check to see if you're approved and which terms you qualify for.

While an unsecured auto loan means that you don't have to worry about the risk of repossession, defaulting on your loan payments can still have significant consequences, including damage to your credit score and possibly even a lawsuit.

Borrower Qualifications
  • Loans are available in all 50 states.
  • Minimum credit score: 660 (according to customer support)
Vehicle Qualifications
  • No maximum mileage, age, or LTV requirements

Best Big Bank : U.S. Bank

U.S. Bank logo

U.S. Bank logo

  • APR Range: As low as 7.76%
  • Loan Amounts: $5,000–$100,000
  • Loan Terms: 1–7 years
Pros & Cons
  • May not require a down payment

  • Autopay discount for U.S. Bank customers

  • Short repayment terms available

  • Not available in all states

  • Charges a prepayment penalty

  • Must apply in-branch with no online pre-qualification?

Why We Chose It

U.S. Bank offers flexible loan amounts, with terms as short as 12 months. What's more, if you're a U.S. Bank customer you can get a discount on your interest rate for setting up automatic payments from your U.S. Bank checking or savings account. Depending on your creditworthiness, the lender may not require a down payment.

However, the lender's online pre-approval feature is only for used cars purchased from its network of dealerships, so you may need to apply at your local U.S. Bank branch for a private party loan—and the bank only has physical branches in 26 states.

Also, if you pay off your loan within one year of disbursement, you’ll be subject to a prepayment penalty worth 1% of the original loan amount. The minimum fee is $50, and the maximum is $100.?

Borrower Qualifications
  • Loans are not available in all states.
  • Does not disclose credit score requirements
  • Does not disclose income requirements
Vehicle Qualifications
  • Maximum vehicle mileage: 100,000 miles
  • Maximum vehicle age: 10 years
  • Maximum loan-to-value ratio: 120%

Best for USAA Members : USAA



  • APR Range: 5.74%–17.34%
  • Loan Amounts: $5,000–$500,000
  • Loan Terms: 1–7 years
Pros & Cons
  • High maximum loan amount

  • Long approval window

  • Flexible loan terms

  • High minimum loan amount

  • No pre-qualification available

  • Must be a USAA member

Why We Chose It

If you're a USAA member, you can benefit from high loan amounts, flexible loan terms, and a relatively comfortable shopping experience. Once you're approved, you'll have 45 days to find a vehicle, giving you quite a bit of time to complete your search.?

The APR range is competitive, but the lender doesn't allow pre-qualification; you’ll need to submit an application and undergo a hard credit check to get an offer and see your rates.?

USAA’s minimum loan amount is a bit high, ruling out some less expensive vehicles. While USAA charges a higher APR on vehicles older than seven years, it doesn't have any maximum age and mileage requirements.

Borrower Qualifications
  • Loans are available in all 50 states.
  • Does not disclose a minimum credit score
  • Must be a USAA member to apply, which requires you to be a U.S. military member or veteran, a pre-commissioned officer, or a spouse or child of a USAA member
Vehicle Qualifications
  • Maximum vehicle mileage: None
  • Maximum vehicle age: None
  • Maximum loan-to-value ratio: 120%

Final Verdict

While it may take a bit more work to get a car loan without going through a dealer, there are plenty of private car loan companies from which you can choose. PenFed can be a great option if you need a small loan, while AUTOPAY is worth considering if you have either near-perfect or poor credit.?

If you like the idea of an unsecured auto loan and don't mind paying a higher interest rate, LightStream is a good option; or, if you're a U.S. Bank customer or USAA member and like to keep all of your finances under one proverbial roof, consider one of those lenders.?

If you didn’t find what you need, see a broader selection of auto loans to continue the search.

Guide to Choosing the Best Private Party Car Loan

How Do Private Party Car Loans Work?

Private party car loans are direct loans, which means that you work directly with the lender instead of going through a dealership. Compared to traditional used car loans, private party loans may carry higher interest rates because lenders consider it a riskier purchase compared to a dealer-sold vehicle that's been vetted by the dealership.

That said, you can often get a lower sales price from a private party compared to a dealer, and you also don't have to deal with extra fees some dealers charge. 

How to Qualify for Private Party Car Loans

The eligibility criteria for a private party loan will depend on the lender. Factors that go into the decision typically include:

  • Credit score
  • Income
  • Debt-to-income ratio
  • Vehicle’s age and mileage
  • Vehicle’s purchase price
  • Vehicle's title (branded titles may be harder to finance)

The application process can also vary by lender, but here are some general guidelines:

  1. If the lender offers pre-qualification, provide some basic information about yourself and how much you want to borrow to get an idea of potential rates and terms.
  2. Complete an official application, providing information about yourself and the vehicle.
  3. Provide documentation to prove your identity, employment, income, and residence.
  4. Lenders may also require you to provide the vehicle identification number (VIN) for the car and may perform an appraisal of the vehicle.
  5. The lender will provide you with details on how to transfer the car title.

Depending on the lender, approval and loan disbursement can take anywhere from a day or two to a couple of weeks.?

The more prompt you are in providing your information and documentation, the faster the loan approval process will go.

Alternatives to Private Party Car Loans

Depending on your situation, you may consider other options instead of getting a private party auto loan. Here are just a few to keep in mind:

  • Dealership financing: If you want a less risky option, consider buying a used car from a dealership and having the dealer arrange financing on your behalf.
  • Bank loan: If you opt for a used car from a dealership, you can still work directly with a lender to get an auto loan. In some cases, you may be able to get even better terms than what a dealer can offer. 
  • Personal loan: If you have great credit and want an unsecured loan, you may be able to get a relatively low interest rate. However, auto loans typically carry lower rates than personal loans on average, so research all of your options before committing to one.
  • Leasing: Leasing a new vehicle is less expensive on a monthly basis than buying one. Depending on your budget and preferences, you may be able to get into the car you want without paying a lot.

Frequently Asked Questions

  • Where Do You Get Private Party Auto Loans?

    Private party car loans are available from traditional banks, credit unions, and online lenders. However, not all lenders that offer used car loans extend that to private party purchases, so double-check before you submit an application to avoid wasting your time.?

  • Are There Private Party Auto Loans for Bad Credit?

    Yes, even some of the best private party auto loans are accessible if you have bad credit. Just keep in mind that you may end up paying a higher interest rate and possibly even additional fees to get approved.?

    As you shop around, look for private party auto loan pre-approval options so you can gauge your approval odds without impacting your credit score. And if you do submit full applications, try to get all of your loan shopping done within 14 days to minimize the negative impact on your credit score (some credit scoring models give you 45 days).

  • Do Private Party Car Loans Have Higher Interest Rates?

    Yes, private party car loans tend to come with higher interest rates compared to used car loans for vehicles purchased from a dealership. Dealers typically have a vetting process to ensure that a car is in good working condition before selling it, making those purchases less risky for lenders.


Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of auto loan lenders. To rate providers, we collected hundreds of data points across more than 20 auto loan lenders, including interest rates, fees, loan amounts, borrower requirements, and vehicle requirements, to ensure that our reviews help users make informed decisions for their borrowing needs.

person driving car

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Article Sources
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