Personal Loans / Car Loans

Personal loans – regularly referred to as car loans – are not secured on the vehicle you buy, meaning you own the vehicle from the start. You borrow the money from a finance provider and use it to buy the car. You then pay the finance provider back over an agreed period.

Typically, you need a good credit rating to get a personal loan.
If you do qualify, a personal loan is a very good option as it’s usually the cheapest form of finance, and you’ll almost certainly get lower interest rates than with HP or PCP. You don’t, however, get the same level of consumer protection as you do with HP or PCP.

Fixed monthly repayments?
Most personal loans offer fixed monthly repayments – but not all. Check.

Repayment period
You choose how long you want to take the loan for, based on how much you can afford to pay each month.

You don’t have to pay any deposit, though you’ll pay less total interest if you do.

Best for?
People who have an excellent or good credit rating and want to own a car in the long term.

Who owns the car?
You own the car as soon as you have paid the dealer.

Flexibility to sell/pay off early
You can sell the car at any time. You can keep choose to keep paying the loan on the original schedule or to pay it off early. There may be a charge for early repayment, but you will save on interest as you’re paying off the original loan term early.

Getting behind with payments
If you can’t afford to keep paying the monthly instalments, the finance company will expect you to sell the car and repay whatever you still owe. You own the car, so you can’t hand it back to anyone.