Hot Topics

What interest rate will I pay and is it negotiable?
Interest rates vary from lender to lender, and it all depends on how much you borrow, and over what period of time.
Will the loan company contact my employer?
Firstly, a loan company will never contact your employer without your consent.
How do I contact the Credit Reference Agencies?
You can request your credit report online, by phone or online. It costs £2 for a copy of your statutory credit report. Here are the details for the three main credit reference agencies.
Can I take the payment protection off/on throughout my loan?
The answer to this question depends on what type of insurance you have.
What does it mean if my payment protection insurance includes cash back?
Some lenders offer a cash back scheme on payment protection insurance – by refunding all or part of the insurance premium after a certain time has elapsed.

What is a Car Loan?

There are three different types of car loan. We have covered them here to make you aware of the options open to you when seeking a car loan:

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Hire purchase (HP)
This sort of car loan is arranged by car dealerships, and in effect it means that you are hiring the car from the dealer until the final payment on the loan has been paid. When the loan has been fully repaid, full ownership of the vehicle is transferred to you.

Manufacturers' schemes
You see these types of loans advertised by the car manufacturer and these can be arranged either directly with them or via a local car dealership. Part exchanges on your current vehicle are normally accepted, and the remaining balance is paid through a loan. As with a hire purchase scheme, you will not be the owner of the vehicle until you have repaid the loan in full. If you default on repayments, the car will be repossessed. The manufacturer will sometimes offer exceptional deals, sometimes interest-free credit on selected models – however these schemes are usually offered at higher interest rates than those found with regular lenders. If the car you are looking to buy is available through a zero percent or low interest rate manufacturer scheme, it would definitely be a good choice.

Personal Loan
You have the option of either taking out a general personal loan, or a personal loan designed specifically for car purchase. The two are almost identical, but because a car loan is taken out specifically to buy a car, the lender may offer you car-related incentives such as emergency breakdown cover, free motor insurance or special discounts on car accessories at affiliate garages and stores. Personal loans normally have lower interest rates than manufacturer schemes or hire purchase loans, however you’re not so likely to get a special low interest rate deal. The main advantage to getting a personal loan is that you are free to shop around for your car, as you are not tied to a specific dealer or manufacturer, and you may find that you have more negotiating power if you are buying with cash.

 

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Risk Warning
Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it. Security by way of a charge on your home may be required.
Think carefully before securing other debts to your home.

 

 

 

 

 

 

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