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Car loan without collateral

If you are considering taking a bad credit car loan may be a website is the first place that you should visit.

There are many benefits to taking a car loan without collateral instead of one with collateral, so here are the benefits:

  1. You can buy the car from anyone, for example from your neighbor or on the Block, and thus do not have to turn to a car dealer.
  2. The age of the car does not matter because it is not your collateral for the loan. You can buy a 30-year-old car if you feel like it.
  3. The condition of the car does not matter, you can buy a renovation item if you want.
  4. You can borrow for the entire car and thus do not have to pay any down payment from your own pocket or cover it with a private loan. If the car costs $100,000 you can borrow $100,000 if you have sufficient payment capacity.
  5. You can put up a car loan with no security of 1 – 12 years, or even up to 14 or 15 years at some banks, and then it does not matter how old the car you buy. There are no car loans with collateral that have such a long repayment period because the banks they want to protect themselves against depreciation.


  1. You cannot borrow more than $350,000 – 500,000 depending on the bank, but few people buy more expensive cars than that.
  2. The interest rate is usually slightly higher than for a car loan with collateral, but with today’s low-interest rates, the difference is small. In addition, there are unsecured car loans that are cheaper than some car loans that require security.

Car loan with security

Car loan with security

There are some benefits of a car loan with collateral also:

  1. If your ability to pay is good enough, you can borrow more than $500,000.
  2. The interest rate is usually slightly lower than for a car loan without collateral, but not always.


  1. You are not allowed to buy the car from a private individual but must do so from an authorized car dealer. A car loan with certainty is therefore not for you who want to avoid car dealers’ premiums and who want to make a real cut in the private market. The few banks that accept the purchase of private individuals require that a partner for them check the car before approving the loan.
  2. You must not buy an old car and it must be in good condition and that means you have to exclude all really cheap used cars.
  3. You rarely get a longer-term than 8 – 12 years. Some banks require the loan to be fully paid off before the car is 8 years old, while others extend to 12 years. If you turn to a bank that requires you to repay the entire loan before the car is 8 years old and buy a 5-year-old car then the loan must be fully paid within 3 years.
  4. You have to pay a 20% down payment because the car loan only covers 80% of the car’s price tag. You either have to pay for it yourself or take a private loan.