Car Loans UK - Buy Car Without Any Hurdles

By: Julia Russell

While you aspire for buying a car, you surely know that it involves huge amount which usually one can not afford from own pocket. So a loan becomes inevitable. In the UK, host of lenders are providing car loans to every type of borrowers. So, for a UK borrower it is easier to buy a car, new or used one, through a loan made especially for the purpose.

are personal loans. And like any personal loans, a car loan comes in secured or unsecured options. Secured car loans are provided against the very car you intend to buy. However, home or any valued asset can also be pledged as collateral of the loan. The main advantage is that secured car loans are of lower interest rate which makes the loan repayment easier and less burdensome. Also, depending on collateral, you can borrow greater amount for buying a new car.

Unsecured car loans are fully risk free offerings for the borrowers as these are provided without collateral. But only smaller loan is approved. Interest rate on unsecured car loans is higher.

Repayment duration of secured or unsecured car loans in the UK remains shorter ranging up to 5-7 years. This is because the market value of the car may fall in longer duration which adds to the risks of the lenders.

Know also that car loans involve down payments from the borrowers. Down payments are a way of lenders to secure the loan. You are supposed to make a certain percentage of the car value as down payment. However, higher down payment ensures easier loan approval and interest rate also gets lowered this way.

Bad credit borrowers are also finding it easier to take car loans in the UK as numbers of lenders are in the loan marketplace to compete for the business. So however a bad your credit history may be, lenders in the UK can provide you a loan.

In the UK, online lenders should be preferred over banks or financial companies. This is because online lenders have lower interest rate loan offers and process the loan without extra charges and in less time.

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