Private party auto loans are easy to apply for and are often surprisingly affordable for many borrowers. In many cases, it is possible to apply for a loan online and have preliminary loan approval within a matter of hours, and final loan approval within 24 to 48 hours of applying.
What Are Private Party Loans?
Private party loans are usually auto purchase loans that are funded by lenders outside of a dealership loan finance company. Lenders for private party loans include banks, credit unions and other lending agencies and organizations. Loans may be for both used and new car purchases and include loans for cars being sold by both car dealerships - franchise and otherwise - and private individuals.
Loan Requirements
Usually private party loans are readily available for most people, even those with less-than-perfect credit. On average, lenders require a minimum credit score ranging between 620 and 700 and very often require income, employment and residency documentation to support application statements.
In many cases, lenders are looking for applicants with at least one year of employment history and six months to a year of residency at their current address. Additionally, lenders require that any bankruptcies be at least two years in the past and that the applicant demonstrate good credit history since the bankruptcy. Additionally, lenders usually require that a copy of the bankruptcy discharge be submitted with a loan application.
Loan Sources
Private party loans can certainly be found with brick and mortar banks and credit unions. But by far, the most popular sources for this type of car purchase loan are Internet lenders. Many traditional banks and credit unions provide the option for borrowers to apply online through their corporate website for a private party loan and applicants are usually delighted to discover that preliminary approval is offered within minutes of applying for a loan. Bank of America, Wells Faro and Chase all offer auto purchase loan applications through their online corporate websites.
Another online source for car loans is to find a loan broker that specializes in auto loans. There are many of these types of websites available. Many of them offer the advantage of collecting basic application information that is transmitted to multiple lenders who then contact the applicant regarding potential auto purchase loans. For individuals who want to have several different options for comparison, this can be an excellent way to shop with a minimum of effort. Once the information is submitted to the website, offers begin to come in via email within 24 to 48 hours. Preliminary offers usually include the loan term, interest rates and loan requirements. Some popular online sources include www.AutoLoanSolutions.com and www.MyCreditTree.com.
If you are looking for an accommodating and popular way to apply for a private party auto loan, you can do so through the Internet. Many banks and credit unions offer Internet applications. Other online sources include auto lenders available through online loan brokers.
Getting an online auto loan approval within 24 hours is not necessarily a scam, but you will probably be dealing with a sub-prime loan company. In many cases, these types of online loans are with lenders that specialize in sub-prime loans. A sub-prime loan will have a higher interest rate and tighter terms. It is important to read all documentation in regards to the loan. Thoroughly check out any company you are thinking about working with. When looking for a car loan it is a good idea to start with your bank or other major financial institutions. Loans from banks and credit unions will normally carry the best rates and are considered the safest types of loans. If you are buying the car from a dealer, they should be able to facilitate your loan as well.
Are Private Car Loans the Easiest to Get When You Have Bad Credit?Private car loans are usually not any easier to get with bad credit than dealership loans. Both private lenders and dealerships are set up to deal with customers that have less than stellar credit. If you have bad credit, you will be paying a higher interest rate regardless of where you get the loan. In many cases it can be a bit easier to deal with a private lender. Banks and credit unions often have entire departments that are devoted to lending to credit challenged customers. The most important thing to do is shop around. Get as many loan quotes as possible. Compare the rates as well as the terms of the loan and decide which is the best for your situation.
