Citizens Bank auto loans are unsecured personal loans you can use to buy a car, not traditional auto loans backed by the vehicle itself
Citizens Bank does not offer traditional auto loans where the bank holds the title to your car as collateral. Instead, Citizens Bank offers personal loans that you can use for a car purchase. The loan is unsecured, meaning the bank cannot repossess the vehicle if you stop paying — but the interest rate will be higher than a secured auto loan from a credit union or traditional auto lender.
You borrow a fixed amount, receive the money in your bank account or as a check, and then use it to buy the car from a dealer or private seller. You own the car outright from day one. The loan term typically ranges from 24 to 60 months, and you make fixed monthly payments to Citizens Bank.
This structure matters because it changes what you pay, what happens if you default, and how the purchase process works compared to walking into a dealership and financing through their lender.
Key Takeaways
- Citizens Bank personal loans for cars are unsecured, so you own the vehicle when ready but pay higher interest rates than secured auto loans.
- You receive the loan funds directly and buy the car yourself, rather than having the bank finance the purchase through a dealer.
- Loan amounts range from $2,000 to $35,000, with terms of 24 to 60 months depending on your credit profile and the amount borrowed.
- Your interest rate depends on your credit score, income, and debt-to-income ratio — Citizens Bank will pull your credit report during the decision process.
- If you default, Citizens Bank cannot repossess the car, but they can pursue collection action and report the delinquency to credit bureaus.
How the loan process works at Citizens Bank
You start by visiting Citizens Bank's website or calling 1-800-922-9999 to request a personal loan quote. You will provide basic information: your income, employment status, existing debts, and the amount you want to borrow. Citizens Bank will perform a soft credit inquiry at this stage, which does not affect your credit score.
If you move forward, Citizens Bank pulls a hard credit inquiry and verifies your income and employment. This hard pull does lower your score slightly, usually by a few points. The bank then makes a decision — typically within one business day — and sends you a loan offer with the interest rate, monthly payment, and term length.
Once you accept, Citizens Bank deposits the funds into your account or issues a check. You then locate the car, negotiate the price with the seller or dealer, and complete the purchase. You do not need Citizens Bank's approval of the specific vehicle, and the bank has no say in what you buy.
Interest rates and what affects your rate
Citizens Bank personal loan rates for auto purchases range from roughly 7% to 36% APR, depending on creditworthiness. The bank does not publish a single rate because each offer is individualized. A borrower with a credit score above 750 and stable income will receive a much lower rate than someone with a score below 650.
Your rate depends on four main factors: credit score, income level, existing debt, and the loan amount. Larger loans sometimes carry slightly lower rates because the bank's cost to service them is proportionally lower. Longer terms (60 months) may carry higher rates than shorter terms (36 months) because the bank carries more risk over time.
Citizens Bank does not offer rate discounts for being an existing customer or for setting up automatic payments, though you should confirm this when you receive your offer. Some banks reduce the rate by 0.25% to 0.5% for autopay enrollment — Citizens Bank's current policy should be stated in your loan documents.
Loan amounts and repayment terms
Citizens Bank personal loans for auto purchases range from $2,000 to $35,000. If you need more than $35,000, you would need to look at a traditional auto loan from a credit union, bank, or dealer financing. If you need less than $2,000, Citizens Bank may decline or offer a smaller personal loan outside the auto-purchase category.
Repayment terms run from 24 to 60 months. A 24-month term means higher monthly payments but less total interest paid. A 60-month term spreads payments over five years, lowering the monthly amount but increasing the total interest you pay over the life of the loan. Citizens Bank will show you the monthly payment and total interest for each term option before you accept.
You make fixed monthly payments on the same day each month. If you pay off the loan early, Citizens Bank does not charge a prepayment penalty, so you can reduce the total interest by paying ahead of schedule.
How Citizens Bank personal loans differ from traditional auto loans
A traditional auto loan is secured by the vehicle — the lender holds the title until you pay off the loan, and they can repossess the car if you default. Citizens Bank personal loans are unsecured, so the bank cannot take the car. This makes the loan riskier for the bank, which is why the interest rate is higher.
With a traditional auto loan, the lender often requires comprehensive and collision insurance on the vehicle. With a Citizens Bank personal loan, the bank cannot require insurance, though your state may require liability coverage and your car loan lender (if you financed the vehicle separately) might. You own the car free and clear, so insurance requirements are yours to decide.
Traditional auto loans also tie the lender to the specific vehicle — they know the make, model, year, and VIN. Citizens Bank does not care what you buy. You could use the loan to purchase a 2024 sedan, a 15-year-old truck, or even a motorcycle. This flexibility is useful if you want to buy from a private seller or a dealer outside the traditional financing network.
Credit score requirements and approval odds
Citizens Bank does not publish a minimum credit score for personal loans, but approval is more likely with a score of 650 or higher. Borrowers with scores below 650 may still be approved, but at higher interest rates or lower loan amounts. Borrowers with scores below 600 face steeper rejection odds.
Beyond credit score, Citizens Bank evaluates your income and debt-to-income ratio. If you earn $40,000 per year and already carry $20,000 in monthly debt obligations, the bank may decline or offer a smaller loan because your income cannot support additional debt. Stable employment and a history of on-time payments on existing accounts improve your odds.
If you are denied, Citizens Bank will tell you why — usually insufficient credit history, too much existing debt, or income too low relative to the loan amount requested. You can reapply after addressing one of these issues, such as paying down existing debt or waiting six months to build more payment history.
Alternatives to Citizens Bank personal loans for car purchases
Credit unions often offer auto loans at lower rates than Citizens Bank personal loans, especially if you have membership through your employer or community. Credit union rates for borrowers with good credit can be 2% to 4% lower than Citizens Bank's rates. You will need to join the credit union first, which usually takes a few minutes and costs nothing.
Traditional auto loans from banks and finance companies are secured by the vehicle, so rates are lower than unsecured personal loans. However, you must buy a specific car and the lender must approve it. If you want to buy from a private seller or need flexibility on the vehicle choice, a secured loan is less convenient.
Dealer financing through the car dealership is another option. Dealers work with multiple lenders and can sometimes offer competitive rates, especially if you have good credit. The downside is that dealer financing often includes add-ons like extended warranties and gap insurance that increase the total cost.
Frequently Asked Questions
Can I use a Citizens Bank personal loan to buy a used car?
Yes. Citizens Bank does not restrict the loan to new cars. You can buy a used car from a dealer, private seller, or auction. The bank does not verify the vehicle's condition or value, so you are responsible for inspecting it and negotiating the price.
What happens if I miss a payment on a Citizens Bank personal loan?
Citizens Bank will charge a late fee, typically $25 to $35 depending on your loan agreement. If you miss a payment by 30 days, the bank reports it to credit bureaus, which lowers your credit score. After 120 days of nonpayment, Citizens Bank may pursue collection action or sell the debt to a collection agency.
Do I need to have a Citizens Bank checking account to get a personal loan?
No. You do not need to be an existing customer. Citizens Bank will open a relationship with you for the loan alone. However, being an existing customer may speed up the verification process because the bank already has some of your financial information on file.
Can I refinance a Citizens Bank personal loan later?
Yes. If your credit score improves or interest rates drop, you can refinance the loan with Citizens Bank or another lender. You would take out a new loan to pay off the old one, ideally at a lower rate. There is no prepayment penalty, so you can refinance at any time.
What if I want to sell the car before the loan is paid off?
You can sell the car at any time because you own it outright — Citizens Bank has no claim to it. You would use the sale proceeds to pay off the remaining loan balance. If the car sells for less than you owe, you are responsible for the difference.