Car Finance Loans
Car Finance Loans
Finding the right car can prove challenging enough and finding a suitable finance option is no easier. There are a number of different car loans available on the market in a range of different sizes, so if you’re looking to secure finance to pay for your car, you might be wondering what options are available to you. The most common ways in which people fund cars is either through a unsecured personal loan or a secured loan.
Unsecured Personal Loan
An unsecured personal loan tends to be more straightforward than other forms of finance. As the loan is unsecured, it does not require you to put an asset (such as your home) down as collateral against the loan. Personal loans are offered by the majority of banks and other lenders, and you can typically expect to borrow between £1,000 and £25,000 over a relatively short period of time (in comparison to a secured loan). Many lenders offer tailor made personal loans designed specifically for the purchasing of a car. Personal loans tend to have a considerably shorter loan term than secured loans.
Lenders will advertise their personal loans with a Representative APR however this is not the amount you are guaranteed to get from taking out a loan with them. The actual interest rate you are offered may be influenced by your personal financial circumstances like how much you earn and your credit history, these factors may also affect the maximum amount a lender is willing to offer you.
A Secured loan is a loan that you take out with a particular asset of yours (usually your home) put up as security. As a result, legally speaking, the creditor from whom you are borrowing the money will retain legal ownership of the asset in question, until you repay the loan. Secured loans generally allow you to borrow larger amounts that personal loans and lenders are not fussy on what you spend on, which is why they have become a popular method of funding a car purchase.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. If you are at all unsure of the suitability of a particular product for your circumstances you should seek independent financial advice.
We work with the majority of UK car finance loan lenders, and have access to leading and exclusive rates on secured loans. Our team of car finance loan specialists can help understand your situation, and give you guidance towards finding the perfect secured loan deal for your own individual circumstances.