What is a Personal Loan?
A personal loan is an unsecured loan. The money you borrow on a personal loan can be used to buy either a car or a commercial vehicle. The money is paid to you directly so you effectively become a cash buyer, whether you're buying a vehicle from a motor dealer or via a private sale. You then repay this money (with interest) at a set monthly rate within an agreed period, usually between 2 and 5 years.
You will need to have a good credit score for an unsecured personal loan. Those with a poor credit score may be declined, as the loan is unsecured against any vehicle (as other forms of finance are) and therefore can present a higher risk to a lender.
Benefits of a personal loan:
What else do I need to consider?
You need to have a good credit score to be eligible for a personal loan, as it's classed as an unsecured loan.
As you own the vehicle outright, you’ll be responsible for all repairs, road tax, MOT's and servicing.
Most vehicles will depreciate in value, so it may be worth a lot less than what you initially paid for it when you come to sell it.
If you sell the vehicle, you’ll still need to pay off any outstanding balance on your personal loan.
Finance is subject to status. Failure to keep up with monthly repayments may affect your credit score and ability to obtain finance in the future.
