A car loan sometimes referred to as car finance or a motor loan can be either secured (against your home) or unsecured.
Bad credit car loans are normally secured against property. People with a bad credit history will find that a secured car loan is the most suitable form of borrowing because they are more likely to be accepted for this type of loan. Secured bad credit car loans can be for any amount from £1000 to £1 million.
Unsecured motor loans are available from £1000 to £1 million, and the loan can be completed within 48 hours. Generally, you should have a good credit history in order to be accepted for this type of loan. In order to protect yourself in the event of illness, accident or unemployment you should also consider taking out payment protection along side the loan, although this is not compulsory.
When telling a loan company or bank that you want a car loan, the loan period is normally upto 5 years with two and three years being the most popular payment terms.
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Car finance is a type of credit offered by a bank or other lender for the specific purpose of buying a vehicle. You enter into an agreement with your lender to borrow a specified amount, usually up to a maximum of £25,000 depending on your circumstances. You then pay back the loan over a set period of time, which due to the nature of cars is usually 5 years or less.
The payments you make consist of both the principal amount of the loan plus interest. Getting a motor loan means that you own the car from the time you buy it as opposed to hire purchase type agreements where you own the car only at the end of the agreement. Auto loans are a form of personal loan which can be either secured (a secured car loan) or unsecured (an unsecured car loan).
If you are looking for a bad credit car loan then this is likely to be a secured loan. With some lenders it is possible to borrow the money in a similar way to a personal contract plan so that for 3 years for example you pay £200 per month with a final payment of £5000 which represents the value of the car at the end of the 3 year period.