1. Hire purchase (HP)
Hire purchase is arranged by car dealers. It’s almost like hiring the car from the dealer until the final payment on the loan has been paid, when ownership of the vehicle is transferred to you.
2. Manufacturers’ schemes
Such loans are put together and advertised by the car manufacturer and can be arranged directly with them or through a local car dealer. Part exchanges on the old vehicle are also accepted in such schemes, and the remaining balance is paid through a loan. The ownership is transferred only after the loan amount is repaid in full.
These schemes are usually offered at higher interest rates than those found with regular lenders.
3. Personal loans
You may take a personal loan designed for car purchase. A car loan is usually taken as a secured loan. The loan is secured on the car itself and not on your property. Personal loans tend to have lower interest rates than manufacturer schemes or hire purchase loans, but special low interest rate deals are less common.
A personal loan will give you the freedom to shop around for your car, as you are not tied to a specific dealer or manufacturer, and you may find that you have more negotiating power as a cash buyer.
Even if you have a bad credit we can help you get a good deal but you might have to pay a slightly higher rate of interest if you have poor credit rating. Loan applications can take anything from ten minutes to two weeks to be processed, and having a bad credit history may mean that you may have to wait longer. However, once the difficult part has been dealt with and your application has been approved, most lenders will credit your bank account or post a cheque to you within a couple of days.