Personal Loans

There are only two main loan options available if you’re looking to purchase a new or used vehicle, and expect to own it at the end of the loan period: Hire Purchase; and Personal Loan. Personal Loans are very popular, as they are available at various places, including Creditas, and allow the consumer to only borrow the amount required after any deposit is paid.

What is a Personal Loan?

Personal Loans are unsecured loans, meaning they are not secured against any of your assets, such as your home or vehicle. They allow the consumer to spread the cost at an affordable amount, over a longer time period, which is usually 1 - 7 years. There can be higher monthly repayments than other loan options, but the vehicle is yours right from the start, unlike with Hire Purchase. Also, the total amount that is paid back, including the interest, is usually less than other loan types.

Who is eligible for a Personal Loan?

Personal Loans are available to those over 18, resident in the UK, and usually, for those who have a good credit score.

Summary of the benefits of a Personal Loan

• You could potentially borrow more than with a credit card
• The rate of interest is usually lower than a credit card, and can be fixed so you don’t pay more with an increase in the interest rate (ensure you check your contract)
• Loan repayment amounts are usually fixed each month, which is better for budgeting purposes
• The length at which you repay the loan, is your choice, and it will determine the amount of interest you are charged
• Personal Loans can be used in conjunction with a Hire Purchase loan, in order to consolidate any outstanding finance relating to the part-exchange of a vehicle