One of the simplest and most common ways of getting the funds to buy a vehicle is to arrange a personal car loan from your bank or building society etc. When you receive the money and purchase your car then you’ll get instant ownership.
With the widest access to the UK’s leading financial lenders, we are able to offer personal loans to purchase a new or approved used vehicle. For those customers who have a good credit rating, a personal loan is the best way to arrange a car finance. When taking a personal loan there will be two options available to you – secured loan or unsecured loan. Secured loans are only available to homeowners or to people with fixed assets.
When taking a personal loan there will be two options available to you – secured loan or unsecured loan. Secured loans are only available to homeowners or to people with fixed assets.
Secured Vs. Unsecured Personal Car Loan
Secured loans are secured against the value of the house. This means that if you do not keep up the repayments, your home is at risk of being repossessed. The benefit of a secured loan is that the APR is usually considerably low. If you are considering taking out a secured loan, you should work out how you would keep up the repayments in the event of unforeseen circumstances, such as long-term sickness or redundancy. An insurance policy may be the best way to go, but make sure that you read all the small print to check it is the right fit for you.
Unsecured loans will have a slightly higher APR. Unsecured personal loan to finance a car is normally offered to people with a good credit history, as the lender would have to go down the debt collection route in the event of non-payment.
Advantage Vs. Disadvantages
The advantage of going for this option is that you don’t need a deposit to get the loan. You can also offset the amount you borrow by partly paying in cash. Whatsmore, if you have a good credit rating, a personal car loan is likely to have a relatively low rate of interest, typically from 3.9% APR.
The downside of getting a personal loan is that you’ll need to have it approved before you can buy the car and, if your credit record is poor then you will be charged a higher interest rate, typically from 19.9% APR. In this instance, you’re also more likely to be offered a secured loan but if you don’t keep up with your monthly repayments then you will be at risk losing your car.
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2. No deposit needed for your new car.
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Set your car loan budget
Representative example – excellent credit Borrowing 7500 over 4 years with a representative APR of 6.9% and a deposit of £0, the amount payable would be £177 per month, with a total cost of credit of £1,035 and a total amount payable of £8,535.