What is a personal car loan?
A personal car loan is a sum of money borrowed from a lender, which is then used to pay for a car or a car-related expense. The money you’ve borrowed will then be repaid in monthly instalments, including interest, across a set repayment term.
The best cheap car loans
It’s not possible to name the ‘best’ cheap car loan. This is because everyone’s financial situation is unique to them, and therefore, different loans suit different people. What could be considered the ‘best’ loan for one borrower won’t necessarily be right for another.
When searching for the best car loan for you, pay particular attention to things like the interest rate and range of repayment terms available. This will help you narrow down your search and find the most suitable loan for you.
The cheapest car loans
Again, it’s not possible to shortlist the ‘cheapest’ car loans, because the cost of a loan will depend on various factors such as the interest rate you’re offered, how much money you borrow, and the repayment term you choose.
Your interest rate will be decided based on your credit score, credit history, and your affordability.
When searching for a cheap car loan, comparing the Representative Annual Percentage Rates (APR) is a good place to start, as this will give you an idea of the yearly cost of the loan. Remember, though, at least 51% of approved applicants will be offered the advertised Representative APR or lower; it won’t be offered to everyone, and depending on your financial history, you could be offered a higher APR.
Is a personal car loan the same as a logbook loan?
No, a personal car loan isn’t the same as a logbook loan.
With a logbook loan, you’ll be required to use your vehicle as security for the money borrowed. This means that if you were to default on your repayments, the lender is within their right to seize and sell your vehicle to recover the money lost.
It’s important to be fully aware of the risks involved with a logbook loan.
A personal car loan, however, will not require you to secure your borrowing against your vehicle.
Cheap personal car loans: how could CashLady help me?
CashLady is a credit broker, and we work with a panel of over 30 Financial Conduct Authority (FCA) authorised and regulated lenders who offer short-term, personal car loans between £100 and £10,000.
Depending on the amount of money you’re approved to borrow, you could repay your personal car loan over a term of 3 to 60 months.
Please note that CashLady does not work with any lenders who currently provide logbook loans.
Can I search for a car loan with CashLady?
You can use CashLady’s credit broking service to search for a personal car loan if you:
- Are over the age of 18;
- Are a UK resident;
- Have a UK bank account and a valid debit card; and
- Have a regular source of income paid into your bank account.
Cheap car loans for bad credit
You’re welcome to search for a car loan with CashLady, whatever your credit score, although you should be aware that a bad credit car loan could come with a higher rate of interest. You should carefully consider whether you can afford to make the repayments before applying.
Searching for a cheap car loan with CashLady
If you meet our eligibility criteria, you can search for a personal car loan with CashLady 24 hours a day, 7 days a week. The CashLady loan search process is entirely online, and our form should take no longer than five minutes to complete.
Here’s how it works.
1. Tell us how much money you need to borrow and for how long by filling in our online form.
2. We’ll run a soft search with no impact to your credit score and scan our panel of lenders for a suitable personal car loan.* You’ll get a result on your screen in just 60 seconds.
3. If we’ve matched you with a car loan, you’ll be redirected to the lender’s website.
4. If you choose to make a full application with the lender, they will carry out a creditworthiness assessment, which will include a hard search or an Open Banking check.
5. Once the creditworthiness assessment is complete, the lender will let you know whether your application has been successful. If you’ve been approved, you’ll officially be offered the personal car loan, and the lender will let you know when you can expect your money to be paid.
6. Use the money to cover the cost of the car and then pay back the loan in monthly instalments until your chosen repayment term comes to an end.
Alternatives to applying for a cheap personal car loan
- Save up
Of course, the ideal solution would be to use your own money; however, this option, while the cheapest, isn’t always possible. Very few of us have hundreds of pounds spare to put towards a new car or car-related costs. If you do have savings, you should consider turning to them as a first port of call. When using your own money rather than applying for credit, you won’t have to pay interest. - Logbook loan
We’ve touched on logbook loans and how they work further up the page. If you’ve got bad credit and have struggled to be considered by lenders in the past, a logbook loan might be something you choose to do more research into. It’s worth noting that you could still be considered for a personal loan, even if you have bad credit. A number of the lenders on the CashLady panel specialise in personal car loans for people with bad credit, and you won’t need to use your vehicle as security. - Car finance
There are several car finance options, including leasing and hire purchase (HP).
Leasing a car is a little like renting a house; you’ll make monthly payments, but you won’t own it.
With hire purchase, you’ll pay an initial deposit and then make monthly payments until the full value has been paid, and then you’ll become the legal owner.
What to do if you can’t afford to make your car loan repayments
If you’re struggling to keep on top of your monthly repayments, it’s a good idea to contact your lender as soon as you can. If they’re aware of your situation, they can work with you to come up with a solution.
Worried about money? Need to talk to someone about debt? Please consider reaching out to one of the following organisations for free, impartial, and confidential advice: StepChange, MoneyHelper, Citizens Advice, and National Debtline.
*CashLady uses soft search technology, which will not affect your credit score. If you’re matched with a lender and you choose to make a full application, they will complete a creditworthiness assessment, which will include either a hard search or an Open Banking check. Please be aware that a hard search will remain on your credit file for up to 12 months, and multiple hard searches in a short period of time will harm your credit score.