If you are looking to buy a car with a personal loan, you may need additional support to be able to afford the car or van.
You have several options to consider, but of course, not every option is available to every would-be buyer. Your financial history and credit history may influence what options are open to you, but have you considered buying a car with a personal loan?
A personal loan is considered to be one of the most straight forward loans to get, usually a quick search on Google for ‘Personal Car Loans’ is the perfect start of your journey in finding a suitable loan for your new car or van.
Our research on a online poll indicates, a bank loan was the most popular choice by the consumer, however we have statics which confirm other personal loans are available not only quicker and cheaper but also more suitable.
There is nothing to prevent you from using this style of finance to fund the purchase of a vehicle, however we recommend you compare your options.
No matter, what you intend to use a personal loan for, you should always look for the best interest rate.
The most effective way of comparing interest rates is to review the annual percentage rates, or APR, of the loan. The APR contains the interest and all charges imposed by the lender so that you can make an informed decision as to the overall cost of the loan.
Be mindful of the fact that when you apply for a personal car loan, there will be an imprint on your credit history. If you apply for personal loans too often, it may impact on your score and hamper your chances of obtaining credit. If possible, apply to lenders who undertake a soft search on your credit score, as this style of search won’t impact on your credit score.
If you do obtain a personal loan to buy a car, make sure you know what the monthly repayment is, and that you can afford this amount each month.
Bear in mind that you will have other costs to contend with, including the costs of running a vehicle. If you don’t currently own a car, you will have expenses like fuel, insurance and other motoring expenses to pay, so make sure you allocate funds in your budget to these costs, but how long does it take to be approved?
It is essential to compare your car loan is a fixed rate loan or a variable interest rate loan. If you have obtained a fixed rate loan, the amount of money you pay each month stays the same. If you have received a variable interest rate mortgage, the amount of money you pay each month may vary.
If interest rates fall, you will pay less money on your monthly bill, but be mindful that interest rates can rise. If rates rise, your monthly payment will increase, and you need to ensure you can afford increased payments.
There are good reasons to use a personal loan to buy a vehicle, including:
There are some contentious issues associated with using a personal loan to buy a car, including:
There are many ways to obtain finance to buy a car, and the option that is right for you may not be suitable for other people. However, many people have decided that buying a car with a personal loan makes sense. If you want to consider this option, and would like to compare your options, choose NowCompare and we will support your research.
NowCompare is all about making life simple, we never charge a fee for our service and are located in the UK with real people on the phone.
