Best Car Loans
When trying to finance the purchase of a car
there are a number of options available to you.
Whether you are going to be leasing or buying
a car, it is likely that a car loan is financially
logical than trying to use a substantial cut of
your savings. Besides, using cash to finance this
idea is not an option for the majority of car
buyers anyway.
See our
Recommended Car Loans
If you are in the process of looking for a new car to buy then the chances are that you will have to take out some form of finance to fund it. Prices of new cars can be very expensive and a car loan is an option worth considering in order to finance the car. Even if it’s time for you trade in your old car for a new one or even buy a brand new car, then a car loan could help you. Dealerships will offer you finance but these often come with very high interest rates attached.
A car loan is usually an unsecured loan which is issued by a bank or specialist Loan Company. The lender will lend you an agreed amount of money over a set repayment period at an agreed interest rate. You will be obliged to repay the loan amount on a monthly basis, which is made up from the capital borrowed plus the interest charged by the lender. Applications are welcome to people aged 18 or above and are a UK resident. You can borrow from as little as £500.00 to £25,000.00 and depending on your circumstances, even more. You can choose the repayment term that is best for you; lenders usually request the loan is paid back over 1 to 5 years.
Many lenders now offer an application service that is available through the internet or via the telephone. It pays to research the internet for the best interest rates on offer for car loans. These types of loans have become big business for lenders and therefore, the market has become very competitive. This is an advantage to you as you may be able to get lower interest rates if you shop around before committing yourself to one lender. If you choose to look at the internet, most lenders now offer a free no obligation quote, which is good way of assessing your suitability for the loan and also how much you could potentially borrow and how much is will cost to repay the loan. If you feel that the internet doesn’t provide the finer details that you require, you should look at dealing with your existing lender. They will be able to book an appointment with their financial advisor who can discuss your requirements in greater detail.
Once you have agreed which lender you are going to use, the application process for a car loan is very simple. You will be requested to provide personal details such as, employment status, details of monthly expenditure and personal bank details. These details will then be used to assess your credit rating. All lenders perform credit checks on applicants to assess suitability for the product applied for. Providing you pass the relevant credit checks, you will be accepted for the loan and the amount you are eligible to borrow will then be finalised in accordance with the credit rating provided. Most lenders are now able to give you immediate decisions as to whether you have been accepted or declined for the loan.
Lenders will lend you money set at an agreed interest rate which will be shown in the form of APR (Annual Percentage Rate). The “APR” is the lenders way of calculating the cost of lending you the Car Loan. The APR can be fixed or variable, with a fixed rate, the rate will remain the same for the duration of the loan period, this give you greater ability to budget monthly as your repayments will always remain the same. With a variable rate, the rate could potentially change at anytime in accordance with any Bank of England base rate changes; therefore, your monthly repayments could also change in accordance with any amendments to the rate.
An additional insurance cover can be purchased which can provide cover should you become ill or lose your job through no fault of your own and wouldn’t be able to make the loan repayments. This is called “Personal Payment Protection” and is worth purchasing if you feel you fit into this category. This cover works much the same as an insurance policy, whereby for an additional monthly fee you will be covered from repaying the monthly loan repayments if you were to lose your job, be involved in an accident or suffer from an illness which would cause you not to be able to work.
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