What you Need to Know about Car Loans
Published: 19 June 2012 By MoneyHighStreet Staff Leave a Comment
With car loans there are a range of options available to you. Whatever your circumstances, it may be possible to still get a reliable and repayable car loan.
How much and for how long
For those opting for car loans from Clydesdale Bank, for example, there are numerous options available. You can borrow anywhere between £1,000 to £25,000; more than enough for the average car.
Likewise, you can borrow this for anywhere between one and five years. This will depend on the amount borrowed. Don’t expect, for instance, to be able to borrow £1,000 over five years.
The longer payment plans are generally reserved for the bigger loans.
Most loans are usually determined by a loan calculator, which takes various pieces of information into account, to determine the available loan terms for you. Those with either a good credit record or a large amount of income may find they are offered better deals; this simply means that you are, on paper, proven to be more reliable at repaying the loan.
Car loans do not need to be in the form of a secured loan. An unsecured car loan is a very common option in today’s market. This gives you more freedom, as you don’t have to worry about any collateral, such as your car, being taken if something goes wrong.
Despite not having any collateral, it is still quite easy to get an effective loan deal. Modern loan companies and banks take various things into account, including your financial records and available income.
Interest and repayments
Like any loan, there will be interest added. This may vary depending on both the loan and your financial records. However, the likes of Clydesdale Bank offer a fixed interest rate, ensuring that you can at least keep track of the added debts and know what to expect.
Additionally, since this interest gathers on a regular basis, often annually, it is easy to see how the debt can grow the longer you plan to repay it.
This is typical loan logic; the creditor looking to gain more profit the longer they go without their money. Shorter payment terms are better for consumers provided you can make the payments.