Car Loans for Poor Credit; what you need to know

To get yourself a log book loan; first you are going to need the vehicle right? Applying for a new car loan or car finance in the UK when you have bad or poor credit isn’t easy, some loan lenders and even some brokers will simply turn you away once they learn of your poor credit status, so is there any help out there for those with bad credit who are looking to buy a new or nearly new car? The short answer is yes.

What kind of Car can you buy with your loan?

Many car loans are not limiting an any respect as to the car you can buy, budgetary constraints and the availability of credit at the time of purchase can vary here in the UK, hence although there may be no limitations as to the make and model of car you can buy with most car loans, some providers will offer you different rates of interest for different borrowed amounts.

Can I buy from the main dealer?
Again many loan companies who lend for cars will not limit or constrain you by forcing you to buy from any particular dealer, although many main dealers will offer a competitive rate of finance on their new cars, often a large deposit is required to secure these rates, as well some of the older cars on the forecourts might not have such solid rates of finance available on them… Seeking a direct loan lender who specialising in car loans could be one solution over taking out a finance package with the main dealer and if you have a poor or adverse credit rating then the rates of interest and repayments could be lower should you choose to source your own finance for the vehicle in question.

Where can I find a better rate?
High-street lenders such as the Everday Loans company often offer highly competitive rates on loans/ finance for cars and automobile purchases; as always personal lenders are a great choice for those people who require a car with little or no deposit as these types of financial products are often offered over a long term, ensuring that you can afford the repayments is much simpler than affording the repayments and paying out the deposit for the initial car purchase, they also have some tips on how to sell your old car so as you get the best price for it.

How much are the repayments?
This inevitably depends on the amount you need to borrow for the car in the first place; there are many types or car available for many different prices, as such ensuring that the car you buy will last the life of the repayments is key, although unforeseen circumstances can change, should you have kids and want a safe car to transport the young ones around; then buying a nearly new people carrier could be a better idea than buying a new mini and then having to upgrade to a bigger car within a few years. As you will be paying for the car every month over the coming years, ensuring you keep it well maintained is at an additional cost to your loan, hence it is wise to calculate the cost of petrol as well as insurance and tax into the lenders rate as this way you can be sure that the running costs of your vehicle are adequately met in advance of purchase.

Although specialist and dedicated car loan lenders operate here in the UK there are some loan lenders based here in the UK who offer car loans and loans for cars to most people. Sometimes the application process is the hardest part where post approval you are free to start looking for a car within the price you can afford.

Julia Written by: