Unsecured car loans

What are unsecured car loans?

Unsecured car loans in the UK are loans taken out to purchase a car without using the car or any other asset as collateral. Unlike secured car loans, which are backed by the vehicle itself, unsecured car loans rely solely on the borrower's creditworthiness and financial situation.

The loan is not secured against the car or any other asset, meaning the lender cannot repossess the car if you default on the loan. Approval and interest rates are primarily based on your credit score, income, and overall financial situation.

The amount you can borrow typically ranges from £1,000 to £50,000, depending on your creditworthiness and the lender’s policies. Interest rates for unsecured car loans are generally higher than for secured loans due to the increased risk for the lender. Rates can vary widely based on your credit profile.

Repayment terms can range from 1 to 7 years, giving you flexibility in how long you want to spread the payments. Most unsecured car loans come with fixed monthly payments, making it easier to budget and manage your finances.

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

Personal loan calculations for 1 year (example)

What are the pros and cons of the loans?

Since the loan is unsecured, your car and other assets are not at risk of repossession if you default. The application process can be quicker and simpler since no collateral evaluation is needed. You can use the loan amount for any purpose, not strictly for purchasing a car.

But due to the lack of collateral, interest rates are typically higher compared to secured loans. Borrowers with poor credit may find it difficult to get approved or may face higher interest rates. The amount you can borrow may be lower than with a secured loan.

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Details of companies offering the financial services:

Barclays Bank

Head office’s address: 1 Churchill Place, London E14 5HP

Contact center: 0800-400-100

Phone: +44 (034) 5734 53 45

Web-site: http://www.barclays.co.uk/

Swift code: BARCGB33

Reference number: 122702

Stock code: BARC

ABN: 01026167

BSB: BARC

Halifax

Head office’s address: The Mound, Edinburgh EH1 1YZ

Contact center: 0345-720-3040

Phone: +44 (011) 3242 19 84

Web-site: http://www.halifax.co.uk/

Stock code: HALP

Lloyds Bank

Head office’s address: 25 Gresham Street, London EC2V 7HN

Contact center: 0345-300-0000

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

Swift code: LBGTGB22

Reference number: 119278

Stock code: LLOY

ABN: 00002065

BSB: LBGT

Nationwide

Head office’s address: Nationwide House Pipers Way

Contact center: 0800-30-20-15

Phone: +44 (034) 5730 20 15

Web-site: http://www.nationwide.co.uk

Swift code: NBSMGB22

Reference number: 106078

Stock code: NBS

ABN: 355B

BSB: NBSM

NatWest Bank

Head office’s address: 250 Bishopsgate, London, EC2M 4AA

Contact center: 0800-88-11-77

Phone: +44 345 788 8444

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

Swift code: NWBKGB2

Reference number: 121878

Stock code: GBP1

ABN: 00929027

BSB: NWBK

Santander

Head office’s address: 2 Triton Square, Regent's Place, London, NW1 3AN

Contact center: 0800-389-7000

Web-site: http://www.santander.co.uk/

Swift code: ABBYGB3E

Reference number: 106054

ABN: 02294747

BSB: ABBY

Tesco Bank

Head office’s address: 2 S Gyle Cres, Edinburgh EH12 9FQ

Contact center: 0800-591-688

Phone: +44 131 203 5000

Web-site: http://www.tescobank.com

Swift code: TPFGGB2L

Reference number: 186022

Stock code: TSCO

ABN: SC173199

BSB: TPFG