Free Guide Download

Personal Loan

What is a personal loan?

An unsecured personal loan is a sum of money lent by a bank or other lender, which is then paid back over a pre-agreed period of time. However, as well as paying back the amount owed, you’ll also have to pay a certain amount of interest.

Using a Personal Loan to buy a car

Personal loans let you borrow an agreed sum, then repay it in fixed amounts each month, normally over a period of one to five years. Interest rates are variable and linked to how much you borrow. So a smaller loan will normally come with a higher interest rate than a larger loan would.

The interest rates that you see advertised are known as representative APRs. These are the rates that at least 51% of applicants will be eligible for.

Here’s an example of the kind of offer you could expect:

If a car costs £12,000 to buy outright, you pay a 10% deposit from your savings of £1,200, leaving £10,800 left to pay.

  •       You're accepted for a personal loan, and borrow £10,800 over three years.
  •       You get a 5% APR deal, meaning payments would be £323.69 a month (so £11,652.68 over the three years).
  •       You drive away from the dealership in your new car, and start to make your monthly loan repayments.
  •       So in total you’d pay £12,852.68

Once all your repayments have been made, you don’t need to do anything else as your agreement is finished.


Getting to know your options

There are lots of different ways to finance your new car, so if you’d like to know more about what’s available, this handy guide from the Money Advice Service will have all the answers.

It’s bank holiday!!! Make your hungover Monday productive and find the car finance product that will help you get t…

07 May 2018

You’re driving through France, sun roof open, kids quiet. Your large boot is comfortably rammed with all the campin…

05 May 2018

Is your #car a #WestBrom, a #StokeCity or a #Swansea? In danger of being relegated? Visit our Car Finance. Made Sim…

04 May 2018

We at Car Finance. Made Simple have the hardest job in the world… making Car Finance Fun! Here’s our latest attempt…

23 Apr 2018

The UK summer has arrived (3 days in April), are you walking around topless with your can of Carling and your shade…

21 Apr 2018

Its #28Degrees in London today… being stuck on the #M25 in rush hour would be a whole lot better in a new convertib…

19 Apr 2018