Student car finance, lending offers

Can a student get a car loan?

Yes, students in the UK can often get car loans, but eligibility criteria may vary depending on the lender and the student's individual circumstances.

Here are some factors to consider:

1. Income and Affordability. Lenders typically assess the applicant's ability to repay the loan. For students, this usually means demonstrating a steady income, which can include income from part-time employment, scholarships, grants, or financial support from family members.
2. Credit History. Many students may not have an extensive credit history, which can make it more challenging to qualify for traditional car loans. However, some lenders offer specialized loans for students or individuals with limited credit history.
3. Guarantor Loans. In some cases, students may be able to secure a car loan with the help of a guarantor - a person who agrees to take responsibility for the loan if the student defaults. Having a guarantor with a strong credit history can improve the student's chances of approval.
4. Down Payment. Lenders may require a down payment, especially if the student has limited credit history or income. A larger down payment can reduce the loan amount and demonstrate the student's commitment to the purchase.
5. Interest Rates. Students with limited credit history or income may be offered higher interest rates compared to borrowers with established credit profiles.
6. Employment Status. Some lenders may require students to have a part-time job or source of income to qualify for a car loan. However, other lenders may consider financial support from parents or guardians as a form of income.

As an alternative, you can also take out a personal loan. Your possible expenses:

Personal loan calculations for 1 year (example)

What are the types of car finance deals for students?

In Britain, students may have several options for car finance deals, depending on their circumstances and eligibility criteria. Here are some common types of car finance deals that students may consider:

1. Personal Contract Purchase. PCP is a popular form of car finance that offers lower monthly payments compared to traditional loans. With PCP, students pay an initial deposit followed by monthly installments over a fixed term, typically two to four years.
2. Hire Purchase is another common form of car finance where students pay an initial deposit followed by fixed monthly payments over an agreed-upon term, usually two to five years. Once all payments have been made, ownership of the car is transferred to the student. HP agreements do not typically include a large balloon payment at the end of the term.
3. Some students may opt to finance a car purchase with a personal loan from a bank, credit union, or online lender. Personal loans offer flexibility in terms of loan amount and repayment terms, but interest rates may be higher compared to other forms of car finance, especially for students with limited credit history.
4. Guarantor Loans. Students with limited credit history or income may consider guarantor loans, where a family member or friend with a strong credit history agrees to guarantee the loan. This can increase the student's chances of approval and may result in lower interest rates.
5. Car manufacturers often offer special finance deals, including low or zero percent APR financing, cashback incentives, or discounted leasing rates. Students should check with dealerships or manufacturer websites for any available promotions.
6. Some leasing companies offer short-term leasing options, which may be suitable for students who only need a car for a limited period, such as during the academic year. Short-term leases typically have lower monthly payments but may require a larger initial deposit.

Before choosing a car finance deal, students should carefully consider their budget, including income, expenses, and any future financial obligations.

Are there car finance options for students with bad credit?

Yes, there are some financial options that students with bad credit may consider:

1. Dealer Financing. Some car dealerships offer in-house financing options for buyers with bad credit. While dealer financing may be convenient, students should carefully review the terms and conditions, as interest rates and fees may be higher compared to other lenders.
2. Guarantor Loans. Students with bad credit may be able to secure car finance with the help of a guarantor - a person with a strong credit history who agrees to guarantee the loan. Having a guarantor can increase the student's chances of approval and may result in lower interest rates.
3. Higher Deposit. Students with bad credit may improve their chances of approval by offering a larger deposit upfront. A higher deposit reduces the lender's risk and may result in more favorable loan terms, including lower interest rates.
4. Improving Credit Score. Students with bad credit can work on improving their credit score before applying for car finance. This can be done by making timely payments on existing debts, reducing outstanding balances, and correcting any errors on their credit report.
5. Shorter Loan Terms. Opting for a shorter loan term can reduce the lender's risk and may increase the likelihood of approval for students with bad credit. While shorter loan terms typically result in higher monthly payments, they may also save money on interest charges over the life of the loan.
6. Subprime Lenders. Some financial companies specialize in providing car finance to individuals with poor credit histories. These subprime lenders may be more willing to work with students who have bad credit, although they often charge higher interest rates to offset the increased risk.

Before applying for car finance, students with bad credit should carefully consider their budget and shop around to compare loan offers from different lenders.

Our specialists have researched the market and gathered the best lending deals for students from banks and financial organizations with the most loyal application approaches. Just follow the links in the table above and choose the offer, that suits you best.

See the similar FAQ about the UK banks:

• HSBC loan repayment reward offer
• HSBC: how to apply for a loan
• How to claim PPI from HSBC?
• MandS Bank loan calculator
• Where do I fins calculators of Clydesdale Bank?
• Wire transfer in HSBC: how to make?

Details of companies offering the financial services:

CarFinance 247

Head office’s address: universal square, Devonshire St N, Manchester M12 6JH

Contact center: +44 333-247-1247

Web-site: https://www.carfinance247.co.uk/

Carplus

Head office’s address: Lumiere House, Elstree Way, Borehamwood WD6 1JH

Contact center: 0203 389-7779

Phone: +44 20-3389-7779

Web-site: https://carplus.co.uk/

Cash Compare

Head office’s address: London

Web-site: https://www.cashcompare.co.uk/

ChooseMyCar

Head office’s address: Alexandra Court, Carrs Rd, Cheadle SK8 2JY

Contact center: 016-1768-1543

Phone: +44 161-768-1543

Web-site: https://choosemycar.com/

Evolution Money

Head office’s address: 9 Portland Street, Manchester

Contact center: 0161-814-9158

Web-site: https://enquiry.clarity-uk.com/

Got Capital

Head office’s address: 131 Finsbury Pavement, London

Contact center: +44(0)203 7500096

Web-site: https://gotcapital.co.uk/

Moneybarn

Head office’s address: Athena House, Bedford Rd, Petersfield GU32 3LJ

Phone: +44 330-555-1230

Web-site: https://www.moneybarn.com/

MoneySuperMarket

Head office’s address: St David's Park, Buckley, Flintshire, CH5 3UZ, United Kingdom

Web-site: https://www.moneysupermarket.com/

Pegasus Finance

Head office’s address: Technology House, Station Rd, Alton GU34 2PZ

Contact center: 800-066-2882

Web-site: https://www.pegasuspersonalfinance.co.uk/

Stoneacre

Head office’s address: London

Contact center: 01-405-310-570

Web-site: https://www.skoda.co.uk/