Car Loans UK
What type of car loan is right for you?
With car loans UK customers have three main kinds to choose from: secured loans, personal contract plans or good old-fashioned personal loans. Personal loans are by far the most flexible way to drive a better car, but the other options have their attractions – and could work out a lot cheaper, too.
When it comes to car loans UK customers have three main choices: secured loans, personal loans and personal contract plans (also known as contract purchase plans, personal leasing plans and similar variations on the same theme). Each type is very different.
Secured loans are the simplest: you borrow money and offer your car as security, and when the last payment has been made you own your car. Interest rates tend to be low and there are lots to choose from. Personal loans are similar, but they're not secured on your car so interest rates tend to be higher. However, you can usually get a personal loan for any purpose, so you could factor in extra borrowing for non-car purposes.
With car loans UK customers have a third option: a personal contract plan. Generally you borrow half the value of the car over a three year period, and at the end of the period you can either pay the balance, walk away or start the process again. It's a good way to finance a brand new car but the terms and conditions can be strict – and if you don't pay the balance at the end of the loan period, you'll never own the car.
loans.org.uk helps you find the best loans companies for your specific needs, and gives you background information on the various types of loans available in our loans articles, more loans articles and still more loans articles.
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