You could technically use an unsecured personal loan to finance a used car purchase. This would allow you to repay your debt through an affordable monthly payment, just as a traditional car loan would. You also don’t risk having your car repossessed if you don’t repay the loan. However, car loans generally have much lower APRs than personal loans do, which makes car loans more affordable in the long run. And, it is usually easier to be approved for an auto loan than it is a personal loan because dealers and financial institutions understand that most people need reliable transportation. As a result, auto loans don’t require good credit for approval. A personal loan may be a good idea to finance car repairs, but not to finance a car purchase. Like any traditional lender, a car dealership will require a credit check before approving you for an auto loan. An exception to this rule is found in some local buy here, pay here car dealers that may approve you without a credit check if you provide a sufficient down payment. Lenders consider three major factors when deciding your eligibility for a loan: your credit report, your verified income, and your monthly expenses. These three things make up most of your creditworthiness. If you take away access to any one of them, a lender may decide to back away from the deal.