Another benefit of an unsecured auto loan is that the loan amount isn’t limited to the value of the car. Do Private Student Loans Have a Statute of Limitations? RATE SEARCH: Shop for the best rates on unsecured auto loans. We do not include the universe of companies or financial offers that may be available to you. That means there is no collateral attached to it. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. The only thing is, you will need to have excellent credit to qualify for the unsecured loans. It's quick, free and won’t hurt your credit score. The four most common reasons why clients choose unsecured loans are for buying a car, home renovations, medical bills and education costs, and debt consolidation. An unsecured car loan is a loan which allows you to purchase a vehicle without needing to attach the car to the loan as security. Interest rate ranges and representative examples are based on an unsecured loan of $30,000 borrowed for 5 years with the interest rate of 11.99% p.a. Of course, if you’re not sure you can afford the payments it is best to avoid getting a loan altogether. When you’re out of work, you need a car to go out and look for a job. editorial integrity, this post may contain references to products from our partners. The owner of this website may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website. Unsecured car loans are a type of auto loan where a car owner doesn’t provide security to the car loan provider. Bankrate.com is an independent, advertising-supported publisher and comparison service. If you do end up in a situation where you lose your job and can’t make the payments, losing your car can make the situation much worse. LightStream offers unsecured loans for a wide range of purposes, including a vehicle purchase. An unsecured loan is a loan that does not require collateral. In this case, all kinds of issues come up, such as no-credit (where the buyer never had to get a loan before) and bad credit (where past debts make a customer a … Unsecured car loans are those which do not require the borrower to put up any collateral. Instead, the approval is based on the credit history of the borrower. When buying a car, taking out a secured loan is considered the norm. An unsecured car loan is not tied to the vehicle and instead is approved based on your credit and ability to pay back the loan. Bankrate, LLC NMLS ID# 1427381 | NMLS Consumer Access Our editorial team does not receive direct compensation from our advertisers. Many lenders make non-specific, 5-figure unsecured loans to consumers who qualify. To get prequalified without hurting your credit score, use SuperMoney’s loan offer engine. You have money questions. If you become delinquent on these loan payments, the lender can foreclose or repossess the property. © 2021 Bankrate, LLC. Avoid These Costly Mistakes, Compare Specialty Homeowners Insurance Reviews, Expert Strategies to Invest in Real Estate, How To Start Investing with $1,000 or Less, Investment Strategies to Start Building Wealth, Finding the Right Investor for Your Startup, Strategies On Increasing Your Current Income, How To Manage Your Personal Finances Successfully, Retirement Savings: Making Up for Lost Time. Many secured auto loan lenders have strict requirements on the cars it will finance, such as the age, make, mileage, and condition. (comparison rate 13.15% p.a. Traditionally, loans for big buys — like homes and cars — use the item being purchased as collateral. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. 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