Auto Loan Statistics

Personal loans and car loans are both options when purchasing a vehicle, but car loans are usually the better choice because they tend to be less expensive. Car loans usually have APRs between 3% and 7%, while personal loans have a much bigger range of possible rates, at 6% to 36%. Another major difference between the two is that a personal loan can be used for just about anything, while a car loan can only be used for purchasing a car. Plus, personal loans are usually unsecured, while a car loan uses the vehicle you're purchasing as collateral.

The average size of a personal loan is $11,700, according to LendingTree. In contrast, the average new auto loan is $32,187, and the average used auto loan is $20,137. So it's possible you might not be able to borrow enough with a personal loan to finance your car purchase. Personal loans and car loans differ in several other major ways, too, like how long buyers have to pay them off.

Personal Loan vs. Car Loan:

Car loans are best for people who simply want to buy an automobile as inexpensively as possible, as car loans offer much lower interest rates than personal loans. Plus, the risk of repossession shouldn't be a concern if you know that you can comfortably afford the monthly payments.

Personal loans are best for people who are willing to pay higher rates in order to have the debt be unsecured. The lender cannot take your car. Instead, they will only be able to send your debt to collections. Or, they may eventually file a lawsuit to try to garnish your bank account or wages.

Both personal loans and car loans may be available to people who have bad credit. But it's a bit easier to get a car loan with bad credit since the lender has the power of repossession. Few reputable personal loan providers offer loans to people with bad credit. Some options include Avant and LendingPoint.

Your credit score affects getting a car loan by dictating your available loan options and the APR you can qualify for. If you have a low credit score, you can still find a lender to approve you for an auto loan. You just may have to do more searching and pay more money than someone with a good credit score.

For example, let's say you're interested in purchasing a new vehicle for the average...

After car loan approval, you can generally expect a small credit score decrease. Applying for a car loan will usually result in a hard inquiry on your credit report, which can affect your credit score for up to one year. The new loan on your credit report will likely cause your score to temporarily fall a bit, too, until it is clear that you can afford to repay what you've borrowed.

In the long run,...

In theory, you can change your car loan due date, but that depends entirely on the financial institution that financed your loan.

Most financial institutions allow you to change your due date up to 15 days after your original due date without a fee, but you should contact your provider and see if that applies to you.

You can remove a car loan from your credit report if the entry is an error by filing a dispute with the three major credit bureaus. If the car loan on your credit report is listed correctly but was never paid off, it will fall off your report after 7 years and you won't be able to remove it early. If the car loan is closed in good standing, it will remain on your credit report for up to 10...

There are a few ways to make a car payment with a credit card, whether you have a loan or a lease. But paying directly with a credit card probably won't be among them, as auto lenders generally will not accept credit cards. They may or may not even accept direct debit card payments. In order to make car payments with a credit card, drivers must instead jump through a hoop or two and do it...

It is certainly possible to have two car loans at the same time, but expect way more scrutiny when applying for the second one.

The lenders will look much closer at your overall credit, which typically needs to be above average in order to get a decent rate on a second loan. You income should confortably acomodate a second car loan as well.

Four common types of loans include personal loans, auto loans, home equity loans, mortgages and more. Each of these loans is used for a different purpose and has different loan amounts, APRs, payoff periods and fees. But one thing most loan types have in common is that the borrower gets a lump sum of money up front and pays it off over time.

4 Common Types of Loans

• Personal loans: A personal loan...

Most lenders will offer 613 credit score auto loans as long as you have a steady income that you can prove or if you have a co-signer. 

With either of these two options, you're able to go in and obtain the vehicle that fits your budget, otherwise, you're out of luck.

The loan amount and APR will be determined based on your credit history and income.