What is a Private Party Car Loan?

Posted by Ryan on August 16th, 2019

There are car purchases that are not done under car dealers rather they are done with private individuals, but can one get auto finance from trying to get a car from a relative or private seller? Yes, there is a private party auto loan agency and the loan agency offer the best of services when it comes to private party auto loan.

What is a private party auto loan?

Let’s not be hasty with the loan and forget to learn what it is and where you can get it.

Private party auto loan is a type of auto loan payments given for one to purchase a car from a private individual instead of a dealership. The private party auto loan generally has higher rates than the usual car loan because lenders see it as a very risky purchase. The title for this loan is transferred by the individual and this would generally make it take a longer time, dealerships are the ones in charge of title transfer and they charge for the services.

Private party auto loans have their good sides and bad sides, one of the bad sides is buying a car that the loan payment has not been completed by the original owner this will cost you more time, on the good side, transfer of title by yourself saves you the extra cash you would have paid to dealership for title transfer.

There are some steps one has to take to get a private party auto loan, they include;

Checking for eligibility: There are criteria that are put into consideration by the lender before giving out a private party auto loan, the criteria might include income, credit score and upfront payment, and age of the car. You can inquire on eligibility from your lender.

Payoff periods and costs: The length of your auto loan, car age, credit history, and car mileage are the factors that would determine your interest rate when getting a private party auto loan. You can either pick a long loan term or a short loan term based on your budget, But remember you will pay more on a long term loan but your monthly payment will not be much.

Application for loan

When you are sure that you are ready to get a private party auto loan or auto refinancing with affordable terms, you will need the necessary documents to carry out the application process successfully. Here are some of the documents required

• Copy of vehicle registration.
• Income and employment details.
• Bill of sale with the price agreed upon attached.
• Personal details like name, address, social security number and date of birth will be required.

Once you are done with the application and it is approved, you are to transfer the registration and title with your name as the new holder and your lender’s name as the lien holder. Learn more about loans from https://en.wikipedia.org/wiki/Loan.