How to Get a Mortgage for an Old Car?
                     How to Get a Mortgage for an Old Car?
Overview
Getting a mortgage for an old car You'll need excellent credit The loan amount will be small
Older cars are seen as high risk collateral by Lenders will want to see a high credit score Due to depreciation, the loan amount will 
lenders. and stable income history. likely only cover a fraction of the car's 
original price
Getting a mortgage for an old car is possible but challenging. You'll need a 
high credit score and the loan amount will be much less than the original 
price.
Timeline
Day 1 Day 14
Meet with a loan officer Receive loan approval 
to discuss financing decision
option
Day 7 Day 30
Submit loan Close on the loan and 
application and take possession of the 
required document vehicl
Eligibility
Old cars often don't qualify for Lenders consider old cars high risk Specialty lenders may offer loans
standard loans The older a car is, the higher risk it poses for Some specialty lenders like credit unions offer 
Cars older than 10 years are usually ineligible lenders due to lower resale value loans for older cars but at higher rates
for standard auto loans from banks and lender
Due to their age, cars older than 10 years often don't 
qualify for standard auto loans offered by most 
lenders.
Alternatives
Friends and Family Personal Loans Credit Cards
Borrowing money from friends or family to Banks or credit unions can provide personal Using a credit card can provide short term 
purchase the car can be an option if you have loans that may have lower interest rates than financing but the interest rates are usually 
close relationships who can lend you mone old car loans very high
While mortgages are common for financing cars, you may want to 
look into alternatives like borrowing from family and friends, personal 
loans, or credit cards if you are purchasing an older used vehicle
Lender Search
Check local credit unions Look for online lenders Ask for help from dealers
Credit unions often have more flexible lending Online lenders like Lightstream don't place as Dealers may know of special lender 
options for older vehicles, keyword: credit unio much emphasis on vehicle age, keyword: programs for older cars, keyword: dealer
compute
With some persistence, you can find financing even for older vehicles.
Down Payment
Larger down payment Shows commitment Lowers monthly payments
Putting 20% or more down on your car loan A large down payment signals to the lender More money down means you have to finance 
improves your chances of getting approved that you are financially committed to the loan less, so your monthly payments will be lower
compared to putting little or no money dow
Making a sizable down payment is one of the best things you 
can do to get approved for a car loan and get better loan 
terms.
Interest Rates
Paying higher interest rates Higher down payment Shorter loan terms
Expect to pay higher interest rates for an You may need a higher down payment for an Older car loans often have shorter loan terms of 
older car compared to a new car since it is older car loan since it is riskier for the lender 2-4 years compared to 4-6 years for new cars
seen as more risky by lenders than a new car
Due to the higher risk, expect to pay higher interest rates and potentially larger 
down payments and shorter loan terms when financing an older car versus a new 
car.
Loan Term
Keep it under 5 years 36-60 months ideal
A longer term means paying more interest Allows paying off loan faster while keeping 
payments manageable
Keep the loan term short to save money on interest and pay off the loan faster.
Credit Score
High credit score Payment history Low credit utilization
A credit score above 720 is considered Having a history of on-time payments shows Using less than 30% of your available credit 
excellent and will help secure the best lenders you are reliable. limits your risk.
interest rates
A very good credit score demonstrates your creditworthiness 
and will offset concerns over the car's age when applying for a 
loan.
Documentation
Proof of income Proof of collateral Credit check
Pay stubs, W-2s, or tax returns Title or registration for vehicle used as Pull credit report to verify creditworthiness
collateral
Documentation provides lender confidence in borrower's ability to repay mortgage.
Insurance
Full coverage insurance will be required Coverage must meet minimum 
All buyers will need to have full coverage insurance requirements
on the vehicle before getting approved for a mortgag The insurance policy must provide liability, collision, 
comprehensive, and uninsured motorist coverage at 
state minimum
Requiring full coverage insurance protects lenders and 
helps ensure buyers can cover repairs and liability for their 
vehicle