Are you in the market for a new car but not sure where to start with financing options? Look no further! In this blog, we’ll be diving into the world of personal loans and breaking down the differences between secured and unsecured loans. Whether you’re a seasoned car buyer or just starting to explore your options, this guide will give you all the information you need to make an informed decision and drive off into the sunset with your dream car.
What is a secured loan?
A secured car loan is a loan that uses the car you’re financing as collateral. If you default on your loan, the lender can seize and sell the vehicle to recoup their losses. Secured car loans are typically easier to obtain than unsecured loans, especially for those with poor credit scores. Additionally, the interest rates on secured car loans tend to be lower, as the lender has less risk involved.
What is an unsecured loan?
On the other hand, an unsecured car loan is a loan that does not use the car you’re financing as collateral. If you default on your loan, the lender cannot seize the vehicle but may try to collect the debt through other means. Unsecured car loans are typically more challenging to obtain than secured loans, especially for those with poor credit scores. The interest rates on unsecured car loans tend to be higher, as the lender has more risk involved.
Should I choose a secured or unsecured loan?
So, which one should you choose? It depends on your situation. If you have a good credit score and a stable income, you may get a better interest rate and more favourable terms with an unsecured loan.
It’s also important to consider the length of the loan and the total amount you’re borrowing. A secured loan may be a better choice if you’re financing a high-value car or taking out a loan for a more extended period, as the lower interest rate can help you save money in the long run.
Ultimately, the choice between a secured and unsecured car loan is a personal one that depends on your financial situation, credit score, and the car you’re financing. If you need help determining which type of loan is right for you, it may be a good idea to speak with a financial advisor or car finance specialist to get expert advice – click here to contact a member of Marsh Finance’s team.
In conclusion, whether you choose a secured or unsecured car loan in the UK, it’s essential to understand the difference between the two and make an informed decision. With careful research and consideration, you can find the right loan to help you finance the car of your dreams.
Here at Marsh Finance, we offer two secured loan options, Personal Contract Purchase (PCP) and Hire Purchase (HP), to help you finance your dream car.
With a PCP, you’ll make lower monthly payments than a traditional loan, as you’re only paying for the vehicle’s depreciation during the term. You can buy the car outright at the end of the term, trade it in for a new one, or return it to us.
With HP, you make regular payments to the lender until you’ve paid off the total amount of the loan, at which point you own the car outright. HP is a straightforward and simple option for those who want to finance a vehicle and have it as their property.
As mentioned, Marsh offer both PCP and HP, two secured loan options. If you are interested in either of these options, visit our homepage to learn about each option. Alternatively, apply for finance and receive a decision within an hour, without having to worry about hard credit searches staying on your file. Apply today, and drive away in your dream car within days.
Rates from 15.4%
Representative example: borrowing £10,000 over 60 Months with a representative of 19.9% APR, an annual interest rate of 17.9% (fixed), and a deposit of £0.00, the amount payable would be 59 repayments of £255.42 per month, with one final repayment of £265.42 (which includes the option to purchase fee of £10.00), with a total cost of credit of £5,335.20 and a total amount payable of £15,335.20.
Marsh Finance Limited are a lender, not a broker.
This is for illustrative purposes only and is not a quote or an offer of finance.