Secured or Unsecured Car Loan?
A secured loan is where you pledge some guarantee for the loan. This is usually your house, or some other property. Because the lender has a reassurance that you will make your repayments, the interest rates for this type of loan tends to be lower and the repayment terms longer than unsecured loans. A secured car loan is only really an option if you are borrowing upward of £20K. You could get some pretty fancy wheels for that sort of cash.

An unsecured loan is not secured against any property so the interest rates are slightly higher and the repayment terms are usually between two and seven years. It is not normally possible to borrow more than around £20K with this type of loan. Your application is considered on your personal circumstances and credit history.

Car Finance Poor Credit
If you have a poor credit history and have defaulted on a loan or credit agreement in the past, you may think your chances of getting a car loan are pretty slim. This might not be the case. You could get a car loan even if you have a poor credit history because lenders assess each application on its own merits and make an offer specific to your individual case. This does not guarantee you will be able accepted for a car loan, but having bad credit might not harm your application as much as you think. If you do have a poor credit history, you will pay a higher interest rate on your loan. But you can start to repair your credit rating by keeping up with the payments on your car loan.

Where can I get a Car Loan?
There are loads of companies who offer car loans. As with all applications for credit, each time you make an application it records as activity on your credit record. This in itself isn’t too bad but if you make a lot of applications in a short space of time it will negatively affect your chances of getting a loan at an interest rate you are happy with.

It is better to use a ‘middle man’ like a broker who can look for the best loan for your individual circumstances. Not only will they be able to shop around for the best deal for you without making a footprint on your credit record, brokers often have arrangements with lenders so that they can offer preferential rates to their customers, like you.

Whether it is secured or unsecured car loan, car finance poor credit is not taken without risk. When you apply for a loan make sure you can afford the monthly payments and have plenty to live on as well.