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Whether you’re looking to buy a new or used car, a personal loan through Budget Money could give you a lower interest rate than a car dealer’s finance plan. However, it is important to note that we don’t offer loans secured on a vehicle.
A car loan is a form of personal finance that enables individuals to borrow funds for purchasing a new or pre-owned vehicle. This financing option allows people to acquire a car they might not have been able to buy outright. While buying a car outright can be expensive, car finance deals offer a more accessible means of acquiring a vehicle, albeit at potentially higher overall costs due to interest payments.
When seeking a car loan in the UK, you must fulfill specific eligibility criteria set by our 44 lenders to secure financing. Lenders typically assess your credit score to evaluate your financial reliability and repayment capacity. A favourable credit score enhances your approval prospects and may result in more competitive interest rates.
Beyond credit scores, lenders also examine your income and employment status. They aim to verify that you possess a consistent income source to ensure timely repayments.
Your age and residency status are also important factors. Generally, you must be at least 18 years old and a UK resident to apply for a car loan. Meeting these eligibility criteria improves your chances of getting approved for a car loan up to £50,000.
Why not consider exploring your car loan options and get a personal loan today through Budget Money!* It only takes 3 minutes to obtain a quote to get a car loan.
Opting for a car loan comes with several benefits that can make the car-buying process smoother and more manageable: Working with our partner Aro, Budget Money gives you access to a trusted panel of UK lenders. If you're ready to explore your car loan options, get covered today through Budget Money!
*Unsecured products only
*Unsecured products only
Loan terms from 1-8 years
With easy online comparison available in minutes
Review your loan options in under 3 minutes
Personal Contract Purchase (PCP) is a popular type of personal car loan. With PCP, you start by paying a deposit, followed by monthly repayments over a set period, typically 2-3 years. One of the key benefits of PCP car finance is its flexibility at the end of the agreement.
You have three options: return the car to the dealer, trade it in for a new car, or pay the remaining balance to keep the car. This structure can make PCP a more affordable option, as the monthly repayments are often lower compared to other finance methods. However, it’s important to plan for the large balloon payment required at the end of the agreement if you decide to keep the car.
When considering a car loan in the UK, it’s important to understand the different repayment options available to you. A key aspect of PCP car finance is the ‘guaranteed minimum future value’ (GMFV). GMFV determines the value of the car at the end of the financing term, allowing borrowers to only finance the difference between the current price of the car and its predicted future value. This can make the financing option potentially more affordable.
You may also want to consider the implications of balloon payments.
Consider the various types of repayment options available, including balloon payments, when selecting a car loan in the UK. With a balloon payment, you make lower monthly installments throughout the loan term, but a larger lump sum is due at the end. This option can be beneficial if you expect to sell the car before the balloon payment is due.
To avoid unnecessary financial burdens, consider the following:
Compare rates from various lenders to secure the a loan that suits you most.
Be cautious of low introductory rates that may skyrocket later.
Read the loan agreement for any hidden charges like prepayment penalties or administrative fees.
Seek clarification on any unclear fee structures before committing.
If you’re unsure whether there are penalties for settling a car loan early, it’s wise to check your loan agreement. Some lenders may charge a fee for early repayment, so reviewing your terms and conditions is important.
Yes, you can use a car loan to purchase a used car from a private seller. It’s a common practice. Make sure to research loan options, negotiate terms, and complete paperwork carefully for a smooth transaction.
When applying for a car loan, you need to provide documents like proof of identity, address, income, and employment. Lenders may also require details about the vehicle you intend to purchase.
If you default on your car loan payments, the lender may take legal action against you. This could result in repossession of the vehicle, damage to your credit score, and additional fees.
Yes, you can pay off a payment early but you may encounter an early repayment penalty when opting for certain types of car loan repayment options in the UK. To better understand the implications of early repayment penalties, consider the following:
Fixed repayment: With this option, you make equal monthly payments throughout the loan term, and early repayment may result in a penalty.
Variable repayment: Here, your monthly payments may fluctuate based on interest rates, and early repayment penalties could vary accordingly.
If you already have a car loan, you might be eligible to top up your borrowing with a new loan. This can be a convenient way to borrow more money without the need to take out a completely new loan. Alternatively, you can opt for a second loan instead of topping up your existing one.
Whatever the need, we can quickly match you with accurate personal loan options that are tailored to you. Find personal loans up to £50,000 over a minimum of 1 year to a maximum of 8 years, with interest rates ranging from 8.9% APR to 275% APR. Representative example: 39.9% APR Representative based on a loan of £7,500 repayable over 60 months at an interest rate of 39.9% pa (fixed). Monthly repayment of £290.14. Total amount repayable is £17,408.37.
Budget Money is a trading name of BISL Limited. Registered Office: Fusion House, Katharine Way, Bretton, Peterborough, PE3 8BG. Registered in England No. 3231094. We are authorised and regulated by the Financial Conduct Authority. We are an independent intermediary dealing with selected insurers. For mutual security calls are recorded and monitored for training purposes.
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