Car Loans, How to Find In the UK?
Car Loans: A Car loan is a loan through which one can buy a new or second-hand car and repay the loan in monthly easy installments. In these loans, the borrower does not need to provide the lender with any asset as collateral. Car loans are the same as Personal loans. Personal loans (or unsecured loans) are where one borrows a sum of money from a lender and agrees to pay it back in fixed monthly payments over a set time. One will be charged interest on the loan, based on a range of factors such as he/she credit score. Because interest increases the cost of borrowing, one should minimize the amount he/she borrows.
Where Can One Get Car Loans
If anyone is looking for a loan for a car, check out the best-buy rates below, though remember, the advertised rate isn’t necessarily the one he/she will be offered. Up to 50% of people accepted for the loan could be given a different – usually higher – interest rate. Lenders will base one’s rate and whether they want to lend to one on several factors, including credit history and income. A higher credit score can mean one is more likely to be offered a lower rate.
Many different companies offer the best car loans at different interest rates. Virgin Car Loan and HSBC are the two best and fastest loan providers at the best interest rates.
Why Get Car Loans With Virgin Money Loans?
Borrow from £1,000 to £25,000
Always know what one will have to pay with fixed monthly repayments spread over 1 to 5 years for loans of £15,000 or less, or over 1 to 8 years for loans over £15,000.
Get a quick decision
one can get an instant credit decision, while current account customers should get a credit decision in 2 to 5 working days.
Quick access to funds
Existing HSBC current account customers could receive the money instantly once one application has been approved and the loan agreement has been signed. current account customers could receive the money in a nominated account 3 working days after when the borrower signed the loan agreement.
Make overpayments free of charge
Manage one’s finances the way he/she wants with the flexibility to overpay, which could reduce the amount of interest he/she has to pay.
Driving One In The Right Direction
Whether one is buying his/her first car, or looking for an upgrade, get some new wheels with a Virgin Money Car Loan. Here’s how this works:
Range Of Loans
Personal Car loans range from £1,000 to £25,000.
Repayment Time of the loans
Borrowers can Repay over 1 to 5 years.
Interest Rates Of The Loans
The interest rates from 6.9% APR to 28.9% APR. If one is an existing customer, he/she may be able to borrow more over a longer period. Check the eligibility to see the terms available.
Also Read: Virgin Money Personal Loans
Borrowing Close To Where Loan APR Changes?
Use the calculator slider tool to see how borrowing slightly affects the monthly repayments and total loan interest amount. one may be able to reduce his/her monthly payments and his/her loan amount by borrowing slightly more. Always make sure one can afford the monthly payments.
See How The Loan APR Changes Depending On the Amount
| Amount of loan | APR |
| £1,000-£2,999 | 22.9% |
| £3,000-£4,999 | 14.9% |
| £5,000-£7,499 | 7.4% |
| £7,500-£14,99 | 6.9% |
| £15,000-£25,000 | 7.0% |
Eligibility For Car Loans
It’s easy to check the eligibility and apply for a Virgin Money loan. Applicants can start a new application or continue with an existing application. To be accepted for a loan one will need to:
1. Be over 18 and have residential in the UK for the last 3 years
2. Applicant must have an income and a UK bank or building society account
3. One must have a good credit history, not be bankrupt, or have any County Court Judgments (CCJs) or decrees.
The Pros Of Personal Car Loans
1. One owns the car immediately. Taking out a personal car loan means one can pay for the vehicle outright and become the owner straightaway, even though he/she spreading the cost over some time. As the owner, he/she can drive and modify the car as you like, which wouldn’t be the case with some other forms of car finance, which may involve a mileage limit, for example.
2. Flexibility and cost management. Personal car loans typically come with various repayment terms, allowing one to choose one that suits his/her needs and budget. For example, one can choose to spread the cost out over a long term with lower monthly repayments, though this would cost you more overall as they pay more interest.
3. Potentially access a wider range of vehicles, support, and options. Financing could allow one to consider a newer – and potentially more reliable – vehicle. One may get the benefit of a warranty and after-sales support if he/she buys from a dealer, and could customize the car to meet his/her spec if he/she buys brand-new.
4. Boost the credit score. Making timely payments on a car loan can positively affect one’s credit score by demonstrating your ability to manage credit responsibly. This will increase one’s chances of getting finance in the future.
The Cons Of Car Loans
1. One could pay significant interest. Borrowing money comes with interest payments, which increase the total cost of the car due to the loan amount. Bear in mind that the longer the loan term, the more the borrower will pay in interest.
2. It’s a BIG commitment. Taking on a personal loan to buy a car is a financial commitment that ties up a portion of one’s income for an extended period. Unexpected life events or financial difficulties can make it challenging to meet monthly payments, so ensure one’s budget carefully.
3. Applicants need a good credit score. Without a good credit score, applicants may not get a decent interest rate and could be rejected for a personal car loan altogether. That means, this is a risk when applying for other types of finance too. See the Credit scores guide for full information on how to check applicants for free, including tips to boost it.
4. The possibility of repossession. If one fails to make payments, the lender may repossess the car. This is not only stressful in itself but can have serious consequences for borrowers’ credit scores and financial stability.
5. Can damage borrower credit score if miss payments. Missing a loan payment can lead to a fine for borrowers, and the lender is likely to report it to credit reference agencies. This will go on borrowers credit report and will impact ability to get credit in future.
It could be more difficult to upgrade. If one prefers to get a new car every few years, personal contract purchase might be a more appropriate form of car finance. Before getting a personal car loan to buy a car, carefully assess the financial situation, consider the alternatives, and weigh the long-term impact on the budget and financial goals. It’s crucial to compare loan terms and interest rates and to fully understand the terms and conditions of any prospective loan agreements.