Taking out a personal loan for anew car is much easier than 10 years ago, the process is quick and simple especially if you were taking out a secured loan. Unsecured loans are quick to process too but would at times depend on the amount you wish to borrow.

Your dealership would offer you finance options which could have a 0% interest rate for the first year. Dealerships which offer their own finance will also give certain offers like extended warranties and insurance for the first year away if the finance option was taken. Offers like these would attract everyone especially when the repayments look attractive.

Do your homework before taking the finance option. It might not be the right type of finance for you because after the 0% interest rate period runs out your monthly premiums will go up.

Find out how much the premiums would be after the offer period and also how the rates are calculated e.g. is it fixed etc. With many finance deals there is a balloon payment which is a lump sum of the remaining amount. This might be frightening when you are thinking of purchasing a £70,000 car with monthly installment which would only have paid off £30,000 leaving you with a lump sum of £40,000. The scheme works like an interest only mortgage.

You have no lump sum to pay which could strain you financially later.

The interest rate can be fixed (depending on the lender and option.)

You do not need to place down collateral for the loan (only if taking out a secured loan).

The repayment method is more flexible because you have different options available.

You can shop around and chose a loan that suits you rather than only having the options stated by the dealership.

If you would like more information about taking out a car loan fill in our online form and one of our loan brokers will give you a call back. They can help you find the right loan package for you along with the best rates available.