How Much Car Finance Do I Qualify For?

Dad checking how much car finance he qualifies for on his phone

Car loans can be a great way to unlock extra spending power and purchase the car you want sooner. The model is hugely popular across the UK, with the latest figures from the Finance & Leasing Association suggesting one in nine new car purchases are paid for using car finance.

While most people are eligible for car loans the amount you can borrow does depend on several key factors. It’s important to consider these when browsing for new cars and hashing out your budget. To help you get an idea of your personal borrowing power we’ve put together a detailed guide to calculating car finance.

Your credit rating

The role of credit ratings is often overlooked when applying for car finance loans. The reality is that credit scores play a hugely important part in determining how much car finance you qualify for. Like home loans, credit ratings are used by lenders to develop an idea of the type of borrower you are. They want to be sure you’ll pay back your debt which is why the process is so carefully vetted.

Ultimately, credit checks are used to determine how much risk is associated with offering you a loan. So how much car finance do you qualify for? Let’s take a look at some of the factors that can affect your credit rating:

  • Payment history

The first thing lenders will look at is your payment history. Even one missed payment can have a negative impact on your credit score so it’s best to stay on top of your debts, even if you’re making the minimum repayment. Regular credit card repayments are one of the best ways to improve your credit score and position yourself as a responsible borrower.

  • Current debt

While credit card debt can be a good thing when applying for a car loan, too much can jeopardise your chances. The trick is to never use more than 30% of your available credit. For example, if your credit card has a limit of £5,000 you don’t want to have a balance owing of more than £1,500. This ratio helps to position you as a responsible and cautious borrower.

  • Previous credit checks

What many borrowers don’t realise is that credit checks can leave a permanent signature on your credit history. Applying for finance can result in the lender carrying out an in-depth credit check, which can appear on your report for up to 12 months. Banks will often carry out hard checks when vetting applicants for credit cards, mortgages and personal loans. It pays to be cautious when it comes to hard credit checks as too many can imply you’re a higher risk applicant. Why? Because too many credit applications in a short timeframe can suggest you’re too reliant on borrowing or are in financial trouble.

Unlocking better interest rates

Not only does your credit rating affect the size of your loan, it can also influence what interest rates you’re eligible for. Applicants with good credit ratings are generally seen as low risk, meaning lenders are willing to offer them better interest rates. Similarly, applicants with low credit ratings are deemed a higher risk and can be penalised with higher interest rates. Applicants with less than desirable credit scores can also be hit with larger fees and charges, another financial hurdle to consider.

At My Car Credit we understand just how important credit ratings are. That’s why we carry out all our initial credit checks using a “soft” approach. Unlike hard checks, soft checks don’t leave a trace on your personal record. This means they can’t be seen by potential lenders and won’t paint you as irresponsible or financially unstable.

Your monthly repayment budget

Your monthly repayment budget will ultimately determine the maximum value of your car loan. When crunching the numbers and calculating your monthly repayment budget be sure to factor in any extra fees and charges that may be associated with your loan. This can include anything from administration charges to ‘balloon payments’ at the end of a Personal Contract Purchase (PCP) loan. 

Factoring in interest rates is also important. You need to ensure that your monthly interest rates don’t surpass your maximum monthly payment budget, or your loan will start to increase.

Calculating the length of your loan

The length of your loan will have a big impact on your monthly repayment responsibilities. For example, a loan of £3,000 over two years will require 24 monthly repayments of £125, not including interest and fees. The same loan spread over a five-year period would require monthly repayments of £50. While the cost of a five-year loan may seem lower, the longer term translates to additional interest. This isn’t necessarily a bad thing, though it is something to be aware of when calculating how much car finance you qualify for.

Using a car finance calculator

Wondering ‘how much car finance do I qualify for?’ In truth, there’s a lot to consider when applying for car finance, which is where a purpose-built calculator can really help. Developed by our team of car finance experts, the My Car Credit car loan approval calculator crunches the numbers for you.

Start with our at-a-glance car finance calculator that asks for your loan amount, preferred repayment term and credit rating score. For a more detailed estimate click ‘Apply Now’ and follow the prompts. Neither will impact your credit score and both are designed to help kickstart your car finance journey and get you in the driver’s seat ASAP.

Want to find out more? Get in touch with the My Car Credit team to discuss your application. With access to more than 25 lenders across all credit requirements, we have the knowledge and expertise to secure you the best possible car loans.

Rates from 6.9% APR. Representative APR 13.9%

Evolution Funding Ltd T/A My Car Credit

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 13.9%, annual interest rate (fixed) 13.85%, 47 monthly payments of £201.38 followed by 1 payment of £211.38 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £2,176.24, total amount payable is £9,676.24.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

How Do Car Finance Calculators Work?

Couple using a calculator to work out car finance

So, you’ve found a fantastic dealership with the perfect set of wheels, and are looking to drive your new car off the showroom floor as quickly as possible. It’s likely you’ll be wondering how best to fund your new car and whether you’re eligible for car finance. What’s more, you may be questioning how car finance calculators work and how much car finance you’d even qualify for.

My Car Credit is here to answer those burning questions. We’ll walk you through using our straightforward online car payment calculator so that you can get behind the wheel with minimal worries and in control of a repayment scheme that works for you. Read on to find out more.

How car finance calculators work

We understand how stressful it can be determining whether you’re eligible for car finance and finding the best car finance option. Between the paperwork and administration, you can end up getting lost in the fine print and end up with a car finance repayment deal that is both confusing and overly expensive.

That’s why we’ve worked so hard to simplify the process, making it as streamlined and hassle-free as possible. Our online calculator is easy to fill in and takes mere minutes to get you answers, crunching the numbers so that you know exactly what you can expect to pay, and when.

What factors our car finance calculators consider

Our calculator helps you establish your monthly repayment terms against the amount you’re looking to borrow. You simply fill in the car loan amount that you’re looking for, and your preferred repayment term, followed by your credit rating. We’ll also ask you for some personal information, such as your email address, current UK address, and employment details.

The calculator will then instantly break down this information and detail the typical rate of interest and monthly payments that you can expect to see depending on your personal circumstances. We’ll also outline the total amount payable, and explain our reasons for this. The calculation is subject to status, but it’s a good indicator of what your options are for car finance.

The benefits of car finance calculators

Using a car finance calculator can help you to establish what type of car finance is right for you. By being able to see any interest rates or monthly payments upfront, you can better see whether the loan offered suits your particular needs and requirements. Don’t forget that a late or missed repayment will affect your credit score, so using a car finance calculator to work out what type of monthly repayment you can afford is a huge advantage. That way, you’ll be better able to budget for your new set of wheels without being unrealistic.

Car finance calculators can be used in one of two ways, depending on where you are in the search for your vehicle. You could use the calculator to work out how much you’ll be paying for a specific car that you have your eyes on. Equally, you can use it pre-emptively before you’ve even found a car to establish whether you’re eligible for car finance. That way, you can establish how much you can afford to borrow before setting out on your search, which might avoid any disappointment further down the line.

Best of all, it’s free to use and there’s no obligation to go ahead. Plus, with us, the rate you see is the rate you get – we won’t surprise you with any extra costs or hidden terms.

Do car finance calculators affect your credit score?

One of the details that we’ll ask you to include when using our car finance calculator is your credit score – whether it’s excellent or good, fair, poor, or bad. Our calculator provides you with a credit rating guide which you can use to judge your rating.

But don’t worry, we’ll only do an initial soft search. This means we’ll conduct a search on your credit file that other lenders can’t see, meaning there’ll be no unexpected impact for you. We make an assessment of your creditworthiness based on the details you provide us and give you an indication of APR (annual percentage rate).

We’ll try to give you an exact APR that’s dependent on your personal circumstances – this is known as your personal APR or real rate. It’s worth knowing, too, that 49% of our customers are likely to get a better rate than the Representative APR, which allows us to clearly advertise our services, so that you can gauge how the rates we offer you compare with other car finance offers.

Our initial soft search is a fantastic way for you to establish whether you’re eligible for car finance without affecting your credit score. But be aware that if you proceed with our car finance, then we will conduct a hard search.

How accurate are car finance calculators?          

Our car finance calculator is specifically designed to be as straightforward and easy to use as possible. It helps you to establish the amount you can expect to pay for your new vehicle. Provided that you give us accurate, up-to-date information, there’s no reason that the car finance calculator would give you incorrect quotes.

That said, it’s worth bearing in mind that the numbers our car finance calculator provides are estimates and not offers. The quotes we supply are contingent on you giving us the correct information, and there are several factors that affect the ultimate cost of car finance.

Use our car finance calculator today

Whatever your car finance needs, My Car Credit is here for you. Our online calculator is easy to fill in and will give you an indication of eligibility and a quote within minutes.

If you choose to proceed with your quote, we have a team of car finance experts just waiting to help you through every step of the process. Backed by a network of over 25 lenders, we’re best placed to get every driver a great deal on finance for their next car. Start your car finance journey today.

Rates from 6.9% APR. Representative APR 13.9%

Evolution Funding Ltd T/A My Car Credit

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 13.9%, annual interest rate (fixed) 13.85%, 47 monthly payments of £201.38 followed by 1 payment of £211.38 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £2,176.24, total amount payable is £9,676.24.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

Check for car finance without affecting your credit score

woman using her ipad to check for car finance online

It’s natural that customers shopping around for car finance can be concerned that an initial credit search will negatively influence their credit score. Initial credit searches usually result in a mark on your credit score - especially when they are abandoned. Very often, customers like to check for car finance before they make a decision or before they've even found a car.

At My Car Credit, we help customers check their eligibility for credit before they formally apply for car finance. This is a great way of taking the worry out of assessing your options. We do this by carrying out a ‘soft search’ credit check at the very start of your application.

What is a soft search?

A soft search is a type of credit check which allows us to see your financial history (i.e. how you’ve managed your loans and finances) without having this information exposed to lenders.

Here’s how it works. Start by using our car finance calculator to get an idea of your monthly payments and finance rate, based on your credit profile. Next, we ask you to complete a short online application form. This should take no longer than three minutes to complete. We’ll require simple details such as name, address, date of birth, contact details, and employment details. You will then receive an instant online decision on screen, with confirmation by email and text.

A tailored approach to car finance

We understand that no two customers are the same. In addition, there are many different factors that can affect the outcome of your application. Our commitment is to find you the best finance solution possible. To do this, we adhere to lending regulations. This involves placing all our prospective customers into one of two categories: prime and subprime.

  • Prime customers (those with a good credit status) will receive an actual annual percentage rate (APR) – this rate is a transparent one, i.e. in the majority of cases this will be the rate a customer will pay.
  • Subprime customers (those with an impaired credit history) will receive confirmation of their application. The My Car Credit team will work hard with our panel of 30+ lenders to get the right deal for your circumstances.

No impact on credit score

Soft search is convenient and provides all the key information needed to get the wheels in motion. However, the key benefit of a is that it is not visible to lenders. This means that it won’t affect your future ability to obtain finance. This is true even in the event that you are declined for finance with us.

If you were to ask for a copy of your credit report, you will be able to see the soft search on there. Within reason, you can have as many soft searches as you like without affecting your credit score. Essentially, a soft search checks for the same type of data that a ‘hard’ application would. The difference is, there is no risk of putting a mark on your credit file.

What does all this mean for you?

The approach at My Car Credit means you have the freedom to shop around for car finance before making a decision. It also ensures that you aren’t penalised if you are refused car finance..

There is also no obligation or fee attached to the soft search application process with us. If you’re not sure that the quoted rate is right for your circumstances, you are free to take the information away with you. However, if you are happy to proceed with the rate you’ve been quoted, simply complete your application with us – it’s as easy as that.

Put simply: A soft search is a fantastic way of starting your car finance application without the worry of affecting your credit score. Soft search provides a very good indication of where you stand in terms of being approved for credit. It’s worth noting, it is not a replacement for checking your credit history and improving your credit score before making an application.

 

Rates from 6.9% APR. Representative APR 13.9%

Evolution Funding Ltd T/A My Car Credit

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 13.9%, annual interest rate (fixed) 13.85%, 47 monthly payments of £201.38 followed by 1 payment of £211.38 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £2,176.24, total amount payable is £9,676.24.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

Is there such a thing as guaranteed car finance?

Man signs agreement for buying car on finance

Put simply – no. Just as there are no guarantees in life, there are no guarantees in car finance. As such, we would advise you to be very wary of any company that suggests they can guarantee car finance to you. At My Car Credit, we don’t offer any guarantees. However, we always do our absolute best to get you accepted for car finance, so you can buy the car that you want.

The truth about ‘guaranteed car finance’

The reality is that the ‘guaranteed car finance’ claim is often a marketing ploy. The goal is to make you think that you’ll definitely be able to get a loan regardless of your circumstances.

Guaranteed car finance simply doesn’t exist. In fact, there have been laws in place since 2010 which state that making a false or misleading claim around finance guarantees for consumer credit is an offence. Additionally, advertisements that contain just the phrase ‘loan guaranteed’ are also banned. The advert would need to include terms and conditions regarding the individual’s credit status to be allowed. 

‘Guaranteed finance’ schemes

Watch out for ‘guaranteed finance’ schemes which are designed to catch you out. A common scheme is to ask for a ‘guaranteed finance enquiry’ fee. Usually this fee and the offer it is meant to guarantee are closely attached to complex small print (i.e. legal jargon). In order to decipher it, you’d need to be a qualified lawyer!

Any finance lender suspected of dealing with customers in this way can end up with a full Financial Conduct Authority (FCA) investigation into their conduct. If upheld, this could lead to them being fined or forced to close.

In summary – almost every guaranteed car finance claim is a scam.

How car finance agreements really work

Car finance agreements are purely based on your individual circumstances and your credit profile. This means that there will inevitably be some individuals who aren’t eligible for car finance. We’ll go out of our way to help you get approved for car finance.  However, it’s our lenders that make the final decision after fully assessing your affordability and credit profile.

A credit profile is a document that contains information regarding your creditworthiness and credit history. Your credit profile includes: what types of credit you hold, the length of time your credit accounts have been open for, if you made your repayments on time, and any applications for new credit. Lenders are far less likely to lend you money if they are not convinced you can repay them. This would naturally be bad business for them. In addition, it is not ethical for them to lend money that could push you into financial difficulties.

A more ethical solution to car finance

At My Car Credit, we only carry out a ‘soft search’ when you first apply with us. This means that there will be no footprint or indication on your credit file that a search has been carried out. Once you have made an application with us and a ‘soft search’ has been performed, we’ll know if you’ll get accepted by one of our lenders on our extensive panel.

The benefit of this approach means that should you unfortunately get declined, your credit profile will not be affected.

How to get accepted for car finance

Whilst we cannot guarantee car finance, there are ways you can improve your chances of getting accepted for car finance.

  • Improve and maintain your credit score
    Your credit score is the main factor that is assessed when you apply for a car loan. This means it’s important you keep your score as high as possible. There are many things you can do to improve your credit score. Not only will a good credit score improve your chance of an acceptance but you will also get a better rate. However, don’t lose heart if you have a low credit sore as there are still plenty of options.

  • Put down a deposit on your car loan
    Paying an upfront deposit on your car loan makes you less of a risk to the lender. Not only is the amount owed on the vehicle reduced but your monthly payments will also come down. Once again, don’t despair if you can’t pay a deposit. There are plenty of no deposit car finance options available!

  • Opt for a Guarantor Loan
    A Guarantor Loan is where a third party (usually a family member or close friend) agrees to pay your loan if you are unable to. This lowers the risk for the lender, improving your chances of an acceptance. It can also lower the rate you are offered. Guarantor Loans are a big responsibility for both parties and shouldn’t be entered into lightly. Make sure you are clear on how a Guarantor Loan works before proceeding.

What we can offer

My Car Credit has access to a large panel of lenders. These have all been vetted and approved by the FCA for their trustworthy operations and the quality of their service.

Our large network of lenders increases the chances of you getting accepted, across all credit profiles (from poor to excellent). Our unique underwriting policy prioritises the best outcome for you, the customer. This ensures we give you the best available deal on car finance for your circumstances.

You can trust My Car Credit because we are part of Evolution Funding, the UK’s largest motor finance broker. We are proud to be award-winning market leaders in the industry. We have helped thousands of customers get the car they want; at the price they can afford. We are also regulated and monitored by the Financial Conduct Authority (FCA). In conclusion, you can borrow for your next car safe in the knowledge that we are professional and reputable.

If you have any questions, our Car Credit specialists are here to help. Finally, you can get an instant decision, that won’t affect your credit file, by applying today.

Rates from 6.9% APR. Representative APR 13.9%

Evolution Funding Ltd T/A My Car Credit

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 13.9%, annual interest rate (fixed) 13.85%, 47 monthly payments of £201.38 followed by 1 payment of £211.38 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £2,176.24, total amount payable is £9,676.24.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

How Does Car Finance Work in the UK?

White car bought on finance driving past the houses of parliament in London

Affordable car finance plans are becoming more popular in the UK. But how exactly does the car financing process work? What are the criteria to being accepted for car finance? And are there different types of car financing?

In this post, we’ll explore everything you need to know about how car finance works in the UK. But first…

What is car finance?

For some people, buying a car outright just isn’t possible. For this reason, more and more people are opting for car finance plans as an alternative. Car finance is a great way to get the car you want. Especially, if you can’t afford the expense of one big, upfront payment for it.

Car finance allows you to drive the car without having to pay a lump sum upfront. Instead, you will be paying monthly payments for the car. It’s essentially a loan to cover the cost of the car, which allows you to spread the cost over a period of several months or years.

The lender does own the car until you have paid the borrowed amount, plus any interest or additional charges in full. However, you have full use of the car whilst you are still paying your monthly payments. And when you’ve paid in full, the car is yours to keep if that’s what you opt for.

Who is eligible for car finance?

There are many factors that can impact your eligibility for car finance. Firstly, you must be at least 18-years old and be a resident of the UK. Most car finance companies will not take on temporary residents.

Credit scores will also be taken into consideration. The higher (or better) your score, the more likely you are to be approved for a car finance plan. Lenders will also look at your employment. Things can become slightly more complicated if your income is reliant on benefits or you are retired.

If you are in stable, long term employment, this can increase the likelihood of car finance lenders approving you. However, even if you have poor credit or bad credit, it is still possible to get car finance with My Car Credit.

On top of all that, the car you’re looking to finance will also be taken into consideration. Costs aside, it needs to be less than eight years old when your agreement begins and less than twelve years old when the agreement ends.

How does financing a car work?

Most car finance plans can be tailored to you. You can opt for a bigger initial deposit to reduce monthly payments or a longer duration to spread the cost out further. The amount you pay each month, interest rates, the terms of the agreement and the length of your car finance plan will all vary, depending on what suits you and the lender best.

To begin with, there are a few different types of car finance:

Hire Purchase:

  • The simplest form of car finance
  • Allows you to spread the cost, plus interest, across a set period of time
  • Deposit is not always necessary, but an initial deposit will bring down the monthly costs and you can trade in your old car as a deposit
  • The lender simply takes the price of the car (minus any deposit) and adds interest. The final figure is then divided over the term agreed, usually between two and five years
  • Monthly payments will never change and there is never a big payment at the end of your plan
  • Once you have finished paying the car finance plan, the car is yours

There are some pros and cons to Hire Purchase. For example, there is a fixed interest rate and monthly payments with no annual mileage conditions or fines for wear and tear. However, you will not own the car until you have finished paying the car finance plan.

Personal Contract Purchase:

Although it offers lower monthly repayment options than the Hire Purchase route, this type of agreement is a bit more complicated. With a Personal Contract Purchase, you have an ‘optional final payment’ at the end of your car finance plan. This is sometimes known as the ‘balloon payment’. By deferring some of the cost of the car to be paid at the end of the plan, the monthly payments are cheaper.

For the Personal Contract Purchase, you decide how much of a deposit you want to make and estimate your annual mileage and the length of the contract. Normally, this type of car finance plan is between 3 and 5 years.

Conditional Sale:

Conditional Sale is similar to Hire Purchase, but you pay higher monthly payments and do not have a fee at the end. As soon as you have paid the car finance plan off, the car is yours.

This type of plan is perfect for people who want to keep the car at the end of the plan, with nothing to pay at the end of the car finance plan. In addition, Conditional Sale allows for longer repayment terms, usually between 2 to 6 years. However, you will not own the car until you have paid the car finance plan in full and you must pay a deposit for a Conditional Sale plan. This is usually 10% of car’s value.

For more information, take a closer look at the different car finance options available in the UK.

How do I apply to finance a car?

With My Car Credit, you can apply for car finance in just a few simple steps:

  1. Complete an application form – fill in our simple online form and we will give you an instant quote.
  2. We will get in touch with you – one of our Car Credit Specialists will get in touch with you, answer any of your questions and advise on what might be best for you.
  3. Choose a car from a dealer – we don’t mind if you have already found your car, just let our Car Credit Specialist know when they contact you. If not, we have some trusted dealers who can help.
  4. Say hello to your new car – we will do all the legwork with the lender and dealer, without it costing you anything.

Get in touch with us today

For an instant quote, use our car finance calculator. It takes into consideration your credit score and is simple to use. With the largest panel of lenders of any UK car finance broker, our chances of finding you the right car finance agreement are increased. We are open 7 days a week, you can call us on 01246 458 810 or email us at enquiries@mycarcredit.co.uk.

Rates from 6.9% APR. Representative APR 13.9%

Evolution Funding Ltd T/A My Car Credit

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 13.9%, annual interest rate (fixed) 13.85%, 47 monthly payments of £201.38 followed by 1 payment of £211.38 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £2,176.24, total amount payable is £9,676.24.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

Will I Get Accepted for Car Finance?

White mini convertible purchased with car loan parked on road

In the UK, there are multiple options when it comes to paying for your car. Given that a car is the second most expensive purchase you will probably ever make, after a house, it’s very important you get the right option for you.

You can purchase a car outright – which isn’t for everybody – or you can opt for car finance. Some car dealerships offer their own finance options, but this is problematic. How will you know if your application for finance will be accepted? And do you really want to visit a car dealer, choose a car and apply in-store – with the risk of being rejected in-person? There must be an easier way… 

Read on as we answer all of your questions about car finance approval.

What actually is car finance?

Car finance is a credit agreement made between you and the lender, organised either directly with the lender, via your car dealer or using a car finance broker. Car finance involves paying for your car through an initial deposit payment, and then paying off the rest of the costs through monthly instalments. In the UK, it is common that car dealerships offer car finance options when consumers purchase a new car.

Can I get car finance?

There are several factors that can impact whether you can get car finance in the UK:

  1. Age – To take out a car finance plan, you must be aged 18 to 75 years’ old.
  2. Residency – You need to be a resident in the UK for at least three or more years. Most companies will not take on temporary residents.
  3. Credit score – For most lenders, this is a big one. The better your credit score, the more likely you are to get approved, but some brokers – like My Car Credit – work with lenders who will take on applicants with poor or bad credit scores.
  4. The car – The car needs to be less than 8 years old when you first take out the finance plan, and it must be less than 12 years old when the finance plan ends.
  5. Employment – Being able to prove you are in stable employment will be favourable for most lenders. Normally, they ask for your previous three months’ bank statements and payslips to prove this.
  6. Benefits – Most lenders will require at least half your benefits to be income based. Benefits that would count as a form of income are, Carers’ Allowance, Local Council Tax Support, Disability Living Allowance, Incapacity Benefit (long term incapacity), Tax Credits, Pension Credit and State Retirement Pension. For any other disability benefits, lenders are more flexible due to the nature of the benefit and will often accept government-funded allowance.
  7. Retirement – Despite being out of employment, retired applicants may be in a good financial position. They would still be required to have proof of their income, whether that be from a pension, investment or property rental income.

What is a credit score?

A credit score is an expression which represents the creditworthiness of an individual. It shows someone’s credit history and lets lenders know what kind of borrower they are and how likely it is that they will manage repayments.

When you apply for car finance, your credit score will be looked at by your lender. People with a higher credit score are more likely to be successful when applying for car finance, and sometimes they can even get better interest rates. This is because they are considered as a ‘lower risk’ when compared to others with a lower credit score.

Lenders will use your credit score to tailor a car finance plan to you. If you have a higher credit score, some lenders will approve your car finance quicker and can often offer you lower interest rates.

Can I still get car finance if I have a poor credit score?

A credit score can impact on your eligibility for car finance, but a poor or bad credit score doesn’t always rule you out. If you have a poor credit score, you will have to jump through hoops with some lenders. The worse the score, the more hoops you will have to jump through.

However, at My Car Credit, we aim to find a car finance option that works for people with a whole range of credit scores and personal circumstances. You can use our car finance calculator to work out if you will be accepted for car finance with your credit score – and to find the best car finance option for you from our large panel of lenders.

Would I get accepted for car finance?

You could go straight through your car dealer for your car finance option, but they often prefer to only offer car finance to good or excellent credit scores. At My Car Credit, we consider all individual circumstances, with the aim of making car finance as simple and accessible as possible.

We have the largest panel of car finance lenders meaning that we are more likely to get someone a car finance agreement. Our smart technology allows us to place you with the best lender for your circumstances in a matter of seconds. We also have a team of manual underwriters, who can assess your individual circumstances where we haven’t been able to find you a deal automatically.

Find out if you can get car finance

At My Car Credit, we aim to help you through every step of the car finance process to make the process as hassle-free as possible.

For an instant quote, and to see what car finance plan you are eligible for, please use our simple car finance calculator. We are open 7 days a week and our website has loads of helpful tips, guidelines and answers to any questions you have.

For more information, call us on 01246 458 810 or email us at enquiries@mycarcredit.co.uk.

Rates from 6.9% APR. Representative APR 13.9%

Evolution Funding Ltd T/A My Car Credit

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 13.9%, annual interest rate (fixed) 13.85%, 47 monthly payments of £201.38 followed by 1 payment of £211.38 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £2,176.24, total amount payable is £9,676.24.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

How to Get Car Finance with Poor Credit

Young lady looking happily at her phone due to getting car finance with poor credit

Between July 2018 and June 2019, 9 out of every 10 cars sold in the UK were paid through some sort of car finance. With that in mind, it’s clear that finance has become the most popular way to buy a car. However, many people are still unsure about their eligibility. Can you get car finance with poor credit, for instance?

In this post, we’ll explore how car finance works and how to get car finance with a poor credit score.

What exactly is car finance?

The FLA defines car finance as a plan that spreads the cost of a new or used car. Instead of paying the full amount for the car upfront, consumers can pay monthly towards the overall cost of their purchased car.

In the UK, it is common for car dealerships to offer finance options to their customers. Alternatively, you can get finance through dedicated finance brokers, who will offer a wide range of financial deals to their customers via a panel of lenders. This allows them to find the best available deals to suit each individual customer.

What impacts whether I am eligible for car finance?

Many factors can impact your eligibility for car finance:

  1. Age – To take out a car finance plan, you must be aged 18 to 75 years’ old.
  2. Residency – You need to be a resident in the UK for at least three or more years. Most companies will not take on temporary residents.
  3. Credit score – For most lenders, this is a big one. The better your credit score, the more likely you are to get approved.
  4. The car you want to take a finance plan out on – The car needs to be less than 8 years old when you first take out the finance plan, and it must be less than 12 years old when the finance plan ends.
  5. Employment – Being able to prove you are in stable employment will be favourable for most lenders. Normally, they ask for your previous three months’ bank statements and payslips to prove this.
  6. Benefits – Most lenders will require at least half your benefits to be income based. Benefits that would count as a form of income are Carers’ Allowance, Local Council Tax Support, Disability Living Allowance, Incapacity Benefit (long term incapacity), Tax Credits, Pension Credit, and State Retirement Pension. For any other disability benefits, lenders are more flexible due to the nature of the benefit and will often accept government-funded allowance.
  7. Retirement – Despite being out of employment, many retired applicants will be in a good financial position. They would still be required to have proof of their income, whether that be from a pension, investment or property.

How credit affects car finance eligibility

A credit score is a numerical expression, which represents the creditworthiness of an individual. It represents someone’s credit history and tells lenders a lot about what kind of borrower they are and how likely it is that they will manage repayments.

When you apply for car finance, your credit score will be looked at by your lender. People with a higher credit score are more likely to be successful when applying for car finance, and sometimes they can even get better interest rates. This is because they are considered as ‘lower risk’ when compared to others with a higher credit score.

Lenders will use your credit score to tailor a car finance plan to you. If you have a higher credit score, lenders can often approve your car finance quicker and offer you lower interest rates.

Can I get car finance with poor credit?

Many dealerships prefer to only offer car finance plans to good or excellent credit scores, which is not good news if your credit score is not particularly great. The lower your credit score, the more hoops they will make you jump through.

While poor credit can make some finance applications tricky, it doesn’t mean you can’t get credit full stop. At My Car Credit, we are committed to finding a finance package that suits you, wherever possible. With the largest panel of lenders out of any other UK broker, we are better placed to get you approved for car finance with a poor credit score compared to other brokers.

Our clever technology allows us to use data-driven decisions to place you with the best lender. We also have a team of manual underwriters who can assess each customer’s individual circumstances to ensure we always give you the best deal on car finance available from our lenders.

Our simple-to-use car finance calculator allows you to see if you will be eligible for car finance with poor credit. Taking your credit score into account, you can get a clear idea of the finance on offer, changing the loan amount and repayment term to suit you.

Where can I go to get car finance with poor credit?

If you’re looking to get car finance with poor credit, My Car Credit can help. Simply enter your credit score, loan amount and repayment terms on our simple car finance calculator and let us do all the legwork.

We’re fully FCA compliant, meaning our customers know exactly what they are getting from us. If you want to find out more about the car finance we can offer you with poor credit, get in touch with our team today. You can call us on 01246 458 810 or email enquiries@mycarcredit.co.uk.

Rates from 6.9% APR. Representative APR 13.9%

Evolution Funding Ltd T/A My Car Credit

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 13.9%, annual interest rate (fixed) 13.85%, 47 monthly payments of £201.38 followed by 1 payment of £211.38 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £2,176.24, total amount payable is £9,676.24.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

What is a Guarantor Loan?

Man hugging his dad after securing a guarantor loan

At My Car Credit, we understand that affording a car can be a challenge. A Guarantor Loan, where a third party agrees to pay your loan if you can’t make repayments, provides an alternative method of taking out car finance. A Guarantor Loan is a big responsibility so it’s important you understand everything that’s involved in taking one out. Here’s everything you need to know about applying for a Guarantor Loan.

How it works

A Guarantor Loan is the same as a normal loan and you are still responsible for making the agreed repayments. However, it also allows for a third party (normally a family member) to guarantee your lender the repayments (in case you fail to make them).

Picking a guarantor

Your guarantor can be anybody between the ages of 18 and 75 with a regular income – they don’t necessarily have to be a homeowner, but this would greatly increase your chances of being accepted. Due to the nature of a Guarantor Loan, it’s a good idea to make sure that your guarantor is somebody who trusts you to make the repayments, as well as somebody that you have a good relationship with. Being a Guarantor is a big responsibility – in the eventuality that you cannot meet your repayments, your Guarantor would be liable for the debt instead. Most people tend to ask a member of their family or a very close friend.

What they’ll need to provide us

Your guarantors will have to go through the same checks and processes as you – they will need to provide their employment and financial history (i.e. income, bank statements, bank details), their proof of ID, and potentially other documents, dependent on the lender’s criteria. This is a standard procedure to reassure the finance lender that your guarantor is a suitable choice.

Once you and your guarantor have been accepted and all the boxes have been ticked, most Guarantor Loans are paid out to you within 48 hours.

Additional advantages

The security of a Guarantor Loan for the lender means that you may be offered a lower annual percentage rate (APR) than you could obtain elsewhere. An APR is the money you have to pay in interest for borrowing money from a lender.

A Guarantor Loan means that you can build and improve your own credit score for the future, because (in theory) you should always make the monthly payments. This means that your chances of being approved for finance will be improving as you go along.

Choosing to take a Guarantor Loan can make it more likely for you to be accepted for car finance. Put simply, this is because having a guarantor makes you a much safer bet for a lender. It gives them a reliable back-up option that they can approach for payments.

What happens if you fail to make the repayments?

Failure to make your monthly repayments will mean that your Guarantor will be liable instead. They will be expected to make the monthly repayments on your behalf. Should they also fail to make the repayments, both of you could be issued with a County Court Judgement (CCJ). This will impact both your credit profiles, as well as affect your abilities to obtain credit in the future.

A Guarantor Loan can be a good solution for certain circumstances but it’s important to remember your obligations to both your Guarantor and the lender.

Ready to take the next step?

If you feel that a Guarantor Loan is the best option for you, why not call one of our Guarantor Loan specialists at My Car Credit – they will be more than happy to help you through the quick and easy process. Or click and apply here with My Car Credit to see if you are eligible.

Rates from 6.9% APR. Representative APR 13.9%

Evolution Funding Ltd T/A My Car Credit

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 13.9%, annual interest rate (fixed) 13.85%, 47 monthly payments of £201.38 followed by 1 payment of £211.38 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £2,176.24, total amount payable is £9,676.24.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

Am I eligible for car finance?

Young people checking on ipad to see if they are eligible for car finance

Car finance is a great way of affording the car you want, allowing you to spread the cost of the purchase over a period of time. However, it can be difficult to know if this is the best option for you. We’re going to take you through everything that can impact your eligibility for finance so that you know where you stand.

Age

We know that ‘age is just a number’ but there are some restrictions on when you are eligible for car finance. The minimum age is 18, and the maximum age is 75. You must fit the age criteria from the beginning date of the agreement – i.e. you can be 17 and organise car finance with us as long as you’re 18 when your agreement starts.

Residency

You need to be a UK resident of more than three years. We do not usually accept temporary residents in the UK, but if you’re living in the UK and have an EU driving license, we may still be able to help. Also: To clear up a question we’re often asked – we do accept residents of Northern Ireland.

Credit score

Your credit score makes a big difference to your chances of being accepted and the terms of your agreement. The better your credit score, the more likely you are to have your car finance application approved and receive lower annual percentage rates (APR). An APR is the amount of interest you pay back for borrowing money from your lender.

If you have a poor credit score, you can still be accepted for finance but you may find that providing a deposit will help you to secure an agreement. There are also a number of ways to improve your credit score.

The vehicle

The vehicle you’re looking to finance must be less than eight years old at the start of your agreement, and less than twelve years old at the end. However, a poor credit history could mean that the age of the car is limited to a maximum of ten years old at the end of the agreement.

There are no limits to monthly mileage unless you’re on a leasing agreement, such as a Hire Purchase agreement. In this case, the usual mileage limit is 100,000, although lenders do have different criteria.

Click to learn more about the different car finance options.

Employment

You must be in stable employment and able to provide your previous three months’ bank statements and payslips. Stable employment history will be viewed favourably and may also help to reduce the interest rate that you pay on your loan.

If you’ve been in your job for less than three months, we may be able to help if you have been consistently employed in the past.

If you are self-employed, it can be more difficult to obtain car finance, but it is possible. You can read more about getting car finance when you’re self-employed.

If you work part-time, you will still have options. You will need to earn the lender’s minimum income criteria and be able to provide three months’ payslips.

Benefits

If you claim benefits you will need to prove that at least half of your income is from employment.

Accepted benefits as forms of income include Carer’s Allowance, Local Council Tax Support, Disability Living Allowance, Tax Credits, Incapacity Benefit (long term incapacity), Pension Credit, and State Retirement Pension.

If you claim disability benefit, lenders try to be more flexible due to the nature of the benefit and will accept government-funded mobility allowance.

Retirement

If you are retired, we’re happy to help – despite being out of employment, usually retired applicants are in a good financial position having had the time to build up a good credit history.

All you will need to do is have proof of income. This would need to come from a pension, investment or property rental income.

Due to the usual age group of retired applicants, lenders may want to minimise the term of the loan to help share any associated risks.

If you’ve found the perfect car and you’re itching to get behind the wheel but you’re not sure how you’re going to pay for it, finance is a great option. We hope this has given you a good overview of the factors which affect your eligibility for car finance, but if you have any questions, give the My Car Credit team a shout – we’re always here to help!

Rates from 6.9% APR. Representative APR 13.9%

Evolution Funding Ltd T/A My Car Credit

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 13.9%, annual interest rate (fixed) 13.85%, 47 monthly payments of £201.38 followed by 1 payment of £211.38 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £2,176.24, total amount payable is £9,676.24.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

Car Finance vs Personal Loan, what’s best for me?

Car dealer handing over the keys to car bought on finance

If you’re looking to buy a nearly-new or used car and considering taking out a finance agreement, you’ll probably already know that there are a few options available to you. At My Car Credit, we want to make this choice easier with our no-nonsense lowdown on car finance options. Whichever option you choose, we are here to take care of it!

Personal Loan

In short: You borrow a lump sum from the lender to buy the car, which means you own the car from the start of your contract. You then repay this money (with interest) at a set monthly rate within an agreed time limit, usually between 24 and 60 months.

Pros:

  • Your interest rate is fixed and lower than other options where your credit score is good
  • Your monthly repayments are fixed, so you can budget around them
  • You own the car from the start of the contract
  • You can choose the time limit of the loan

Cons:

  • Your interest rates can be higher if you have a poor credit score
  • You are entirely responsible for the car and all repairs
  • You have to borrow over £1,000

Ideal for people:

  • Who want to own the car from the start of their contract
  • Who want flexibility with their repayment structure
  • Who are looking for lower interest rates

Eligibility

Most people will be eligible to take out a Personal Loan. However, those with a bad credit score or those with a bad credit history (especially those that have CCJ court orders against them) may be declined.

At My Car Credit, we work closely with a number of trusted Personal Loan funders. You can make an application on our website to determine your chances of being accepted and because we only carry out a ‘soft search’, there will be no trace left on your credit file.

Hire Purchase

You put down a deposit on a car and the lender pays for the rest. You then ‘hire’ the car from the lender until you have paid off your monthly repayments, at which point the car becomes yours. Your monthly repayments are paid within an agreed time frame, usually between 12 and 60 months, and will differ dependent on how much deposit you put in.

Pros:

  • The repayment time limit is more flexible
  • Your interest rate is fixed, and will be lower depending on your deposit amount
  • You are more likely to be accepted if your credit score isn’t the best

Cons:

  • You don’t own the car
  • You have to pay a deposit
  • There can be additional fees (such as a transfer of ownership fee at the end of the contract)

Ideal for people:

  • Whose finances and circumstances are suited to fixed monthly repayments
  • Who don’t have the best credit rating
  • Who want to own the car at the end of their loan
  • Whose disposable income could change (e.g. starting a family, changing jobs)

Eligibility

Hire Purchase agreements are one of the more accessible car finance options. Although not everyone is accepted, there is normally a broader spectrum that this option will cater for, i.e. credit profiles that range from excellent to poor, and several employment statuses, including retired, young professional and self-employed.

At My Car Credit, we have access to a large panel of lenders that offer excellent Hire Purchase agreements. You can make an application on our website to determine your chances of being accepted and because we only carry out a ‘soft search’, there will be no trace left on your credit file.

Personal Contract Purchase (PCP)

You borrow the difference between what the car costs when you take out the loan and what it will cost at the end of the loan. This is called a Guaranteed Future Value (GFV). In other words, if the car costs £3,500 at the start of your loan and will cost £1,500 at the end of your loan, you need to borrow £2,000. The GFV also includes your estimated mileage as a factor. Normally this kind of loan will last between 18 and 48 months. At the end of your loan, you have three options: buy the car by paying what it costs at the end of your loan, give the car back and settle the loan, or part exchange for a new car.

Pros:

  • Your options are more flexible at the end of your loan
  • Service and maintenance packages, as well as warranties and insurance, are normally included
  • You could drive a new car that you couldn’t afford with a cash payment

Cons:

  • It’s more expensive than other finance options to buy the car outright
  • Additional charges are made if the mileage agreement is exceeded
  • You don’t own the car during the loan

Ideal for people:

  • Who want to drive a new model
  • Who frequently want to change the car they drive
  • Who don’t want the responsibility of owning a car outright

Eligibility

PCP is slightly stricter in terms of its acceptance rate. Normally, a fair credit score is required.

At My Car Credit, you can make an application on our website to determine your chances of being accepted for a Personal Contract Purchase and because we only carry out a ‘soft search’, there will be no trace left on your credit file.

If you need any help or advice about which finance option is best for you, whether it’s a Hire Purchase agreement, Personal Contract Purchase agreement or a Personal Loan, our team of Car Credit Specialists can advise you. Just give us a call!

Rates from 6.9% APR. Representative APR 13.9%

Evolution Funding Ltd T/A My Car Credit

My Credit Rating

Excellent

  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed

Good

  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs

Fair

  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit

Poor

  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past

Bad

  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan
£

X monthly repayments of
£X

Typical rate

Loan amount

Total payable

X% APR*

£X

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 13.9%, annual interest rate (fixed) 13.85%, 47 monthly payments of £201.38 followed by 1 payment of £211.38 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £2,176.24, total amount payable is £9,676.24.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!