So you’re now contemplating purchasing a car on borrowed funds. Broadly the choices of finance available in such a situation are:

• Secured loan
• Unsecured loan
• Car Finance

A secured loan is available only to home owners. If you own a home and have excellent credit status, a secured car loan is the best option in terms of cost of finance (read interest costs). However, such borrowing often consumes considerable time as lenders need to go through a lot of steps before issuing the cheque in your name. These include credit checking, writing to your mortgage lender and gaining the approval and completing the formalities of second charge on the home etc. If you’re prepared to wait out, it’s still worth it.

If, however, you are in a hurry, the options left are an unsecured car loan and car finance. An unsecured loan, as the name implies, is given with no security. Implicit in such lending is the high risk. Lenders often charge very high interest on such loans. Depending on your credit status, this can vary, but as a rule the cheapest unsecured loan is more expensive than the most expensive secured loan. There are unsecured lenders like Welcome Finance who specialise in giving loans to those with poor credit history. So those with impaired credit history often go to such lenders and opt for unsecured car loans.

Between secured car loans and unsecured car loans lies car finance (car credit). Secured against the value of the vehicle, the interest rate of car finance is generally higher than secured loan but lower than unsecured loan. Interest rate, however, varies with the credit status of the individual. Other factors like employment status, marital status, annual income etc. too are considered while arriving at the loan amount and rate of interest. A car finance or car credit also has the following additional advantages which makes it a big draw with car buyers:

• Quick process
• Easier to obtain than a loan.
• Lenders offer incentives such as part exchange, cash back, free insurance etc. to make their offer more attractive.

Car finance or car credit is advised for people who satisfy one or more of the following:

• Home owners with bad credit or do not want to take on an additional liability on their home for whatever reasons.
• Tenants 
• Short of time

Irrespective of which option is suited for you, you’re advised to spend some time researching the market before deciding on which lender to go for. That will be time well spent.

With credit availability declining and interest rates trending up, car finance companies too are tightening their lending norms. Welcome Finance, leaders in the sub-prime car finance market has recently announced withdrawal of funding from independent car dealerships, running into 100’s across the United Kingdom. Welcome Car Finance will now be available for those purchasing cars from the company’s showrooms numbering twelve. This would mean that several borrowers with poor credit status will find it more difficult than ever to get finance for purchasing their cars.

Other lenders like ACF (formerly Approved Car Finance) and Ucan have not made any changes to their lending norms yet, but if the interest rate continues its present trend, they too are expected to be more rigid in their lending.  

Car credit is a term synonymous with car finance. A car finance is a loan that is secured against the value of the car that is often selected from the finance company’s showroom. In other words, car credit comes as a ‘car plus finance’ package deal. Car credit companies often offer several incentives to potential customers to make their deals attractive to them. These may include free insurance, cash back, part exchange and other freebies. The leading car credit companies in the UK are:

Welcome Car Finance

Approved Car Finance (Now ACF Car Finance)

Ucan Car Credit

All these companies offer guaranteed car credit if you satisfy the following conditions:

- Are a UK resident

- Over 18 years of age

- Have a valid full UK driving licence

A guaranteed car credit offer becomes relevant when you have a less than perfect credit history. High street lenders are often unwilling to advance loans to people in such financial circumstances. This is where guaranteed car credit lenders come to the picture. Their interest rates may be higher than that of the mainstream lenders but you stand the best chance to get finance from these lenders. The interest rate charged will depend on your credit history (of course!), repayment capacity and the term of the loan.

Though it is often called guaranteed car credit, no lender will be willing to give money to someone who has no clear source of income and hence dubious capacity to repay. As such an annual income of at least £5,000 is often insisted upon. If you have poor credit circumstances have a regular income with sufficient repayment capacity, these lenders are there to help you out.

Leading car finance lender Welcome Finance has announced the discontinuation of the £250 cash back promotion offer.  The company communication to this effect claims that Welcome’s car finance still compares favourably with the competition at 19.90% APR typical. Moreover, other popular offers like £1000 minimum part exchange and 7 days’ free insurance continue to be open. 

While we hope that the market conditions will soon ease and Welcome Car Finance will reintroduce the offer, for the moment, the effective cost of financing a car will go up for borrowers. Also, at least a few would find themselves ending up being able to borrow lower than they had wanted and hence settle for a cheaper car or, unfortunately, not eligible for finance at all.

Many of us need a car finance at the time of purchasing a car. It’s advisable to buy a car from a car dealer rather than walking directly into a company. Car dealers arrange for some useful services of automobiles loans and automobile insurance. Dealer financing is probably the best route for a low interest car loan as they deal in large volumes. You can always opt for automobile refinancing if you are not satisfied with the car finance provided by your dealer.

Automobile Loans, Automobile Insurance and Automobile Refinancing are the three factors which play an important role at the time of purchasing a car.

• Automobile Loans

Automobile Loans largely help the buyers to finance their cars. The automobile dealership will help you get a better negotiating power with an approved automobile loan. Automobile loan terms can be shorter or longer. If you go for a higher car loan term you will have to effectively pay a high interest rate and vice versa. You can be assured a low interest rate so far as the car dealers have access to multiple financial institutions.

• Automobile Insurance

If you have a car, it’s best to have an automobile insurance too. All you have to do is apply for an automobile insurance and pay the premium to the insurance company once a year. If you meet with an accident, damage your vehicle and spent lots of funds on its repairs all you have to do is just inform the insurance company and get all your money back. A car dealer can help you find a good insurance package too.

• Automobile refinancing

Automobile refinancing can help you when you are having bad credit history. Your poor credit scores can make you pay a much higher rate of interest on the loan. One does not need an assessment for refinancing the automobile loan. You also need to make a note of all the reasons you need to refinance. Consumers who do not pay enough attention to the automobile financing can land in trouble and might have to pay a higher interest rate.

Buying a car after a bankruptcy may not be so pleasing to hear. But now it is made so safe and simple that anyone can apply for a car loan after bankuptcy with a loan. A bankruptcy is filed when a person or organisation, fails to pay its creditors. It is always a blow for your credit ratings and status. But don’t think that bankruptcy is the end of the world, but take it as a chance for a better and brand new start.

If you are not so much in need of money and could wait for a period of at least 2 years after the bankruptcy, you will be able to get your unsecured loan or car finance. Mostly, it won’t be the situation. A person after bankruptcy will be often in need of money. But to get your loan in such a situation you will need a guarantee. This is the case with most of the financiers who won’t be ready to give loans to a person after bankruptcy until after 2 or 3 years. Yet the good news now is a growing number of financiers are offering loans to those who have just got out of bankruptcy. Credit Unions are the perfect place for finding a financier for you. For that, you must be a member of a credit union. The probability of getting the loan is higher if you are a member of a Credit Union.

Before applying for the loan there is an important decision that you alone have to take. Which is the car that you are intending to buy? This decision must be wisely taken because a number of things are associated with it. You must think how much you can afford as monthly installments, you have to take care of your needs with the vehicle, and the period of repayment. All these play a crucial role in deciding the exact package of loan for you. You must also think of some ways to make your financial state as neat as possible before applying for the loan. For example you may fund all your credits into one savings account. You must take care that all the monthly instalments are paid on time. These can create a better impression about you on the financer and they will become willing to offer you progressively better interest rates.

While applying for the loan, the financier may ask you for your credit report. This is a chance for you, don’t forget to add a page in your credit report describing the reasons for your bankruptcy and low credit.

Now a days, financiers are giving refinancing options to their customers. Even if the initial interest rates are a little high the financiers give their clients a chance to lower their interest. Probably after one year, according to your repayment record and credit status, the financier may lower your interest rates. So be sure with your monthly payment and financial managements that can upgrade your credit rating.

Before signing on any documents please read them carefully and ask the associated persons if you have any doubts. As already stated, there will be a number of financiers around you to provide you with a loan after bankruptcy.  Carsonfinance.co.uk can help you find out the best car finance deal after bankruptcy.

Convinced? Wish you good luck in your search for the car

If you badly crave for a car but do not have adequate money to purchase one, taking a car loan is the best option. But if you have an adverse credit record, you might think that you’ll find it difficult to find yourself a loan. However, you need not worry as there are a multitude of lenders who are willing to provide an adverse credit car loan now-a-days.

You may be suffering from an adverse credit record due to many reasons which include defaults, arrears, missed payments, bankruptcy, insolvency, county court judgement, individual voluntary arrangement etc. An adverse credit car loan is especially designed for people with an adverse credit status.

An adverse credit car loan can help you improve your credit history. These are typically short-term loans with repayment periods lasting from three to six years. Almost all lenders will conduct an analysis regarding your financial standing and ability to repay before giving you a loan. With an adverse credit, it is likely that you will be charged a high rate of interest, at least initially.

There are two basic categories of adverse credit car loans: secured and unsecured. With a secured adverse credit car loan, you would require to offer your property as collateral. Secured loans come with a comparatively low interest rate, small monthly instalments, and long repayment periods  and also give you the advantage of availing of a high loan amount. However, your property may be repossessed in case of default. On the other hand, in case of an unsecured adverse credit car loan, there is no requirement of any collateral, paperwork is less and the money is delivered quickly. But these loans have a high interest rate, larger instalments and shorter repayment period.

You can research on the internet to avail an adverse credit car loan. Shop around and request for online quotes. Try and find a lender who offers the most competitive rate and who can process the loan as quickly as possible.

You may be in urgent need for a car finance to buy a car but are bogged down by your bad credit record. You may be suffering from bad credit due to any reason such as bankruptcy, county court judgment, individual voluntary arrangement, arrears, defaults, etc. But you need not worry because now-a-days, car finance is available even to those who have a bad credit score. 

When you go to a car finance company with a bad credit record, they will first check your credit information and assess the kind of finance you require. They will then forward the information to an authorized car dealer. The car dealer then finally approves your loan. In case you fail to get an approval, the finance company will assist you by telling you how to improve on your credit standing.

There are two basic categories of bad credit car finance: secured and unsecured. If you take secured bad credit car finance, you will need to give your car as collateral to the lender. As the risk factor for the lender is less, these loans come with low interest rates and longer repayment tenure. On the other hand, in case of unsecured bad credit car finance, there is no collateral required but the interest rates are high and repayment period short.

The eligibility criteria to avail bad credit car finance are: you need to be above 18 years of age and should have a regular source of income. Some finance companies try and ensure that you did not have any auto loan repossessions in the past. Bad credit car finance come with a high rate of interest compared to conventional loans. To improve your credit score, you should never fail to make any repayment and should always make them on time. After you have improved your credit score, you can always go for a car refinance to reduce the interest rate and monthly installments.

It is always a good idea to undertake proper research before committing yourself to a particular car finance deal. Compare various loan quotes and try to pick one that suits your personal needs and requirements. You can use a loan calculator to evaluate monthly instalments. Check the reputation of the lender whom you are going to take the car finance from. You can also conduct your research online thus saving time, effort and money.

Bankruptcy loans are provided to those people who are having credit problems and are on the verge of bankruptcy or even after bankruptcy. These loans are sanctioned under the advice of bankruptcy experts. It is actually a relief to people in severe bad credit conditions (Bankruptcy information, 2007). The advice for this loan could be obtained online and after this there would be a short personal and confidential interview and based on this the loan would be sanctioned. The amount sanctioned and the interest rate would depend on the profile of the borrower.

It is possible to get personal loans, home loans and car loans after bankruptcy, provided the borrower has completed a stipulated period of time after bankruptcy. The car loans under this category are categorised as bad credit loans and would have a high interest rate compared to the usual personal or unsecured car loans. Such loans are available to buy a new car or a used car (Bad credit car loans can help with car loans with bad credit or after bankruptcy). Most of the lending companies offer loans to buy a car for a person with bad credit after bankruptcy. Since there is much competition between different lenders the interest rate would not be too high compared to the normal loans.

Thus it could be seen that a person in the UK could buy a used or new car soon after his bankruptcy when his credit score is still poor. These loans could be applied online and the interest is also not very high because of the heavy competition in this field.

Reference:-

Bankruptcy information (2007)
http://www.bankruptcy-uk.co.uk/bankruptcy-information.asp

If you have decided to take a car loan, it is advisable to take your time and compare various car loan offers before homing in on one. This would not only help you in getting the best deal available but also help you in saving a lot of money, both in the short run and the long run.

While comparing car loans there are various things that you need to consider. Given here are a few points that you should keep in mind.

Loan term: Find out the term of the car loan. Most car loans have a term ranging from one to seven years. This will determine the monthly payment that you will need to make.

Interest rate: Review the rate of interest being charged on the car loan. With a lower interest rate, you can save a lot of money. In case you have a bad credit history, inevitably you will be charged a high rate of interest. Also find out whether the interest rate is fixed or variable.

Other fees and charges: There may be various other fees and charges such as establishment fees, annual fees, etc. that may be mentioned only in fine print. Ensure that you check the fine print for such fees.

Repayment options: Find out what all payment options are available to you; whether you can make repayments weekly or fortnightly or pay more than the monthly instalment and pay off the loan early. Find out whether there are any early-discharge penalties and prepayment privileges on the car loan.

In case you have a bad credit history, it is good idea to fix your credit score before you go for a car loan as the interest charged will be higher and it will be comparatively more difficult to get a good deal. You could compare car loans by visiting your local bank, checking car dealerships or checking online. You may find it easier to check online as it could save your time, effort and money. Remember, you can get the best deals only by comparing car loans.