Best Private-Party Auto Loans in 2025
Borrow money to buy a car from a private seller
Best lenders for private-party auto loans
older or high-mileage cars:
- No limits on model year
- No mileage restrictions
- Doesn’t increase rates for private-party loans
- Need to become a credit union member to close on loan
- Branches limited to Tennessee
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. Southeast Financial also offers short-term auto loans and doesn’t increase rates if you’re taking out a private-party car loan.
However, Southeast Financial’s branches are limited to Tennessee — so look elsewhere if you need in-person customer service.
You must have a credit score of at least 600 to qualify for an auto loan. You’ll also need to join the credit union before you can borrow.
All Southeast Financial members must open a savings account with a deposit of at least $5. To become a member, you must meet one of the requirements below:
- Be a current employee or retiree of a Southeast Financial Select Employee Group
- Live, work, worship or go to school in certain parts of Tennessee, Kentucky or Mississippi
- Be related to a current Southeast Financial member
- Make a $5 donation to Autism Tennessee
What is a private-party auto loan?
A private-party auto loan is a type of car loan you can use to buy a car from an individual seller, rather than a dealership.
Lenders often limit the age and mileage of the car and charge higher interest rates for used car loans for private sales, as these purchases are riskier.
Unlike dealerships, private sellers won’t necessarily keep the car in good condition or get it inspected before listing it for sale.
What to know about private-party auto loans
A car loan for a private sale works a little bit differently from a traditional auto loan for a car purchased at a dealership. Here are some details to keep in mind when considering this type of loan.
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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 have to handle all of the paperwork yourself. Dealerships can help you with your auto loan application, car title, registration and sales tax. You should also run a VIN check and get the car inspected before buying it — things that dealers typically do for the cars on their lots. -
Wait for the seller to pay off any existing liens on the car.
If there’s 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, registration and sales tax yourself.
You’ll ultimately be responsible for handling all the paperwork that dealers typically take care of. Be sure to avoid buying a car without a title.
Expert insights on car loan rates
Auto loan rates have fallen in recent months, thanks to rate cuts from the Federal Reserve, but that trend may end. The Fed has stopped rate cuts for now.
Will tariffs affect used car prices?
Tariffs are likely going to make car shopping more expensive and if you’re worried about prices, you’re not alone. According to a LendingTree survey, more than 3 in 4 (77%) Americans worry that tariffs will drive up the cost of owning a vehicle. Of those 77%, 40% plan to cut back on the amount they’re driving.
How to find a private-party car loan with LendingTree
Shopping around for an auto loan on LendingTree can save you an average of $5,198 over the life of your loan. Here’s how it works.
1. Tell us what you need
Take two minutes to tell us who you are and how much money you’ll need. We’ll take care of the rest. It’s free, simple and secure.
2. Shop your offers
We’ll send you offers from up to five trusted lenders. Compare your offers side by side to see which one will save you the most money.
3. Get your money
Choose an offer and work with the lender to finalize your loan. Some people see money in their accounts within 24 hours, depending on the lender they choose.
How to qualify for a private-party auto loan
Check your credit
To get a car loan for a private sale, you typically need to meet a lender’s debt-to-income ratio and credit score requirements. There’s no universal minimum credit score to buy a car, but most people who qualify for car loans have scores above 660. Check your credit score for free with LendingTree Spring to make sure your credit is up to par.
Check the lender’s requirements
Some lenders are clear about what kind of credit and income you need to qualify, and some even specify any car age and mileage restrictions. Check your preferred lender’s website to see if they publish this information.
Prequalify
While some lenders don’t list their requirements upfront, they may let you check your eligibility by prequalifying for a car loan. You’ll see the potential APRs, terms and amounts you could qualify for without taking a hit to your credit.
Yes. Even if your credit score needs work, it’s possible to find 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 save you money. Even raising your score from “fair” to “very good” could save you $2,316 on your car loan.
Private-party auto loans vs. alternatives
You may not be able to get a car loan for a private sale if the car has high mileage, a salvage title or costs less than the lender’s minimum loan amount. If that’s the case, consider these alternatives to cover your car purchase:
RV loan alternatives
Take out a personal loan
You can use a personal loan to buy a car, as lenders are typically flexible in how you can use loan money. 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.
You can get a personal loan from lenders like LightStream and U.S. Bank to fund your private-party car purchase.
Lease a car
Leasing a car is typically cheaper than buying one, 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 car 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 and fees. This is an especially good option if you have bad credit, as lenders typically charge high interest rates to borrowers with poor credit scores.
Frequently asked questions
In some ways, private-party auto loans work the same as regular auto loans. You’ll apply for your car loan and answer questions about yourself and the car you want to buy. The lender will check to make sure you and the car meet their requirements. If you do, the lender will make you an offer and you’ll sign a loan agreement and get your money to buy the car.
The main difference between a private-party auto loan and one from a dealership is that you’ll handle all of the paperwork yourself, including the title transfer, registration and sales tax.
Yes. Most lenders allow you to use loan money for almost anything (except illegal activities and secondary education), so you can use a personal loan to buy a car. Learn more about how you can use a personal loan.
If by private loan you mean personal loan, then no — it usually isn’t better to get a personal loan to buy a car. Auto loans tend to come with lower rates than personal loans because they’re secured with the car you’re buying. Lower rates mean more money in your pocket.
Using a personal loan to buy a car can be quicker, since there’s usually less paperwork involved. However, because they don’t require collateral, it’s typically a more expensive way to finance.
Our methodology
We examined more than 30 auto lenders that offer private-party auto loans at competitive rates to select the top six 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.
According to our systematic rating and review process, the best private-party auto loans come from Digital Federal Credit Union, myAutoLoan, Navy Federal Credit Union, PenFed Credit Union, PNC Bank and Southeast Financial Credit Union.