Car loans
Are you ready to buy a new or used car? A car loan could help you start the journey to owning your car outright. Here we explore what you can expect from a personal car loan and how it differs from other kinds of car finance.
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What is a car loan?
A car loan gives you the upfront funds to buy your car, letting you spread the cost over time with monthly payments that work for you. You choose the term that fits your budget, making car ownership easier and more manageable. As with any type of finance, it's important to do your research to find the option that works best for you before making an agreement with your lender. Some of the benefits of car loans include:
Buy now, pay over time
Get the car you need today without an upfront payment
Flexible payment plans
Spread out your payments over a timeline that suits you
Manageable costs
Smaller monthly payments keep your finances steady and predictable.
Affordable rates
Enjoy lower interest rates than typical personal loans, so you can save money.
What is a car loan?
A car loan gives you the upfront funds to buy your car, letting you spread the cost over time with monthly payments that work for you. You choose the term that fits your budget, making car ownership easier and more manageable. As with any type of finance, it's important to do your research to find the option that works best for you before making an agreement with your lender. Some of the benefits of car loans include:
Buy now, pay over time
Get the car you need today without an upfront payment
Flexible payment plans
Spread out your payments over a timeline that suits you
Manageable costs
Smaller monthly payments keep your finances steady and predictable.
Affordable rates
Enjoy lower interest rates than typical personal loans, so you can save money.
What is a car loan?
A car loan gives you the upfront funds to buy your car, letting you spread the cost over time with monthly payments that work for you. You choose the term that fits your budget, making car ownership easier and more manageable. As with any type of finance, it's important to do your research to find the option that works best for you before making an agreement with your lender. Some of the benefits of car loans include:
Buy now, pay over time
Get the car you need today without an upfront payment
Flexible payment plans
Spread out your payments over a timeline that suits you
Manageable costs
Smaller monthly payments keep your finances steady and predictable.
Affordable rates
Enjoy lower interest rates than typical personal loans, so you can save money.
How our car loans work
Whether you’re after your dream car, thinking about switching to electric, or just need a bit more space in the boot, an Oodle Car Loan could help you cover the cost.
Apply online and get pre-approved
If approved, the money could be in your account the next working day
It's easy to manage your loan through our app
How our car loans work
Whether you’re after your dream car, thinking about switching to electric, or just need a bit more space in the boot, an Oodle Car Loan could help you cover the cost.
Apply online and get pre-approved
If approved, the money could be in your account the next working day
It's easy to manage your loan through our app
How our car loans work
Whether you’re after your dream car, thinking about switching to electric, or just need a bit more space in the boot, an Oodle Car Loan could help you cover the cost.
Apply online and get pre-approved
If approved, the money could be in your account the next working day
It's easy to manage your loan through our app
Applying for a car loan
You can apply for a car loan from banks, credit unions, online lenders, or even directly from car dealers. Car loans are often quicker to set up than other finance options. You’ll need to pass a credit check, and most loans come with fixed interest rates (though variable options are sometimes available). Then, choose a loan term that fits your budget.
Hire purchase
With hire purchase (HP), you borrow the car's value and pay a deposit upfront. You then make fixed monthly payments over a set term while using the vehicle. If you miss payments, the lender may reclaim the car. Once you’ve paid everything, including a small option-to-purchase fee, the car is yours.
Simple
Once all payments are made, plus a small final fee, the car is fully yours
Fixed Monthly Payments
Predictable payments make budgeting easier
Personal contract purchase
Personal Contract Purchase (PCP) agreements let you borrow an amount based on the car's estimated depreciation, resulting in smaller monthly payments. At the end of the term, you can buy the car with a larger lump-sum 'balloon' payment, but you don’t own it during the agreement.
Lower Monthly Payments
Pay only for the car’s depreciation, keeping monthly costs lower.
Flexible End-of-Term Options
At the end, either make a lump-sum 'balloon' payment to buy the car or return it.
Personal contract hire
Personal contract hire (PCH) is a popular way to lease a car. With PCH you agree to hire the car for a set timeframe and you pay an initial upfront rental fee. You then have full use of the vehicle during the rental period and you return the car at the end. There is no option to buy at the end of the agreement.
No Ownership Option
Use the car for a set term, then simply return it at the end—no option to buy.
Flexible Leasing
Enjoy the latest models with manageable monthly payments, then renew or upgrade when the term ends.
Other types of finance:
Alongside car loans there are a range of other car finance options available.
Alternatives to getting a car loan include hire purchase, personal contract purchase and personal contract hire.
Applying for a car loan
You can apply for a car loan from banks, credit unions, online lenders, or even directly from car dealers. Car loans are often quicker to set up than other finance options. You’ll need to pass a credit check, and most loans come with fixed interest rates (though variable options are sometimes available). Then, choose a loan term that fits your budget.
Hire purchase
With hire purchase (HP), you borrow the car's value and pay a deposit upfront. You then make fixed monthly payments over a set term while using the vehicle. If you miss payments, the lender may reclaim the car. Once you’ve paid everything, including a small option-to-purchase fee, the car is yours.
Simple
Once all payments are made, plus a small final fee, the car is fully yours
Fixed Monthly Payments
Predictable payments make budgeting easier
Personal contract purchase
Personal Contract Purchase (PCP) agreements let you borrow an amount based on the car's estimated depreciation, resulting in smaller monthly payments. At the end of the term, you can buy the car with a larger lump-sum 'balloon' payment, but you don’t own it during the agreement.
Lower Monthly Payments
Pay only for the car’s depreciation, keeping monthly costs lower.
Flexible End-of-Term Options
At the end, either make a lump-sum 'balloon' payment to buy the car or return it.
Personal contract hire
Personal contract hire (PCH) is a popular way to lease a car. With PCH you agree to hire the car for a set timeframe and you pay an initial upfront rental fee. You then have full use of the vehicle during the rental period and you return the car at the end. There is no option to buy at the end of the agreement.
No Ownership Option
Use the car for a set term, then simply return it at the end—no option to buy.
Flexible Leasing
Enjoy the latest models with manageable monthly payments, then renew or upgrade when the term ends.
Other types of finance:
Alongside car loans there are a range of other car finance options available.
Alternatives to getting a car loan include hire purchase, personal contract purchase and personal contract hire.
Applying for a car loan
You can apply for a car loan from banks, credit unions, online lenders, or even directly from car dealers. Car loans are often quicker to set up than other finance options. You’ll need to pass a credit check, and most loans come with fixed interest rates (though variable options are sometimes available). Then, choose a loan term that fits your budget.
Hire purchase
With hire purchase (HP), you borrow the car's value and pay a deposit upfront. You then make fixed monthly payments over a set term while using the vehicle. If you miss payments, the lender may reclaim the car. Once you’ve paid everything, including a small option-to-purchase fee, the car is yours.
Simple
Once all payments are made, plus a small final fee, the car is fully yours
Fixed Monthly Payments
Predictable payments make budgeting easier
Personal contract purchase
Personal Contract Purchase (PCP) agreements let you borrow an amount based on the car's estimated depreciation, resulting in smaller monthly payments. At the end of the term, you can buy the car with a larger lump-sum 'balloon' payment, but you don’t own it during the agreement.
Lower Monthly Payments
Pay only for the car’s depreciation, keeping monthly costs lower.
Flexible End-of-Term Options
At the end, either make a lump-sum 'balloon' payment to buy the car or return it.
Personal contract hire
Personal contract hire (PCH) is a popular way to lease a car. With PCH you agree to hire the car for a set timeframe and you pay an initial upfront rental fee. You then have full use of the vehicle during the rental period and you return the car at the end. There is no option to buy at the end of the agreement.
No Ownership Option
Use the car for a set term, then simply return it at the end—no option to buy.
Flexible Leasing
Enjoy the latest models with manageable monthly payments, then renew or upgrade when the term ends.
Other types of finance:
Alongside car loans there are a range of other car finance options available.
Alternatives to getting a car loan include hire purchase, personal contract purchase and personal contract hire.
Are car loans secured or
unsecured loans?
When it comes to borrowing, loans generally fall into two categories: secured and unsecured. Understanding the difference between them can help you choose the option that best fits your needs and comfort level. Secured loans involve using an asset as collateral, while unsecured loans don’t require anything as security—but each type comes with its own pros and cons. Here’s a closer look at what each option means for you.
Secured loan
A secured loan is one where the lender uses an asset you own, like a property, as security. If you can’t keep up with your payments, the lender has the right to reclaim the asset.
Mortgages are a common example of secured loans, where the home itself serves as collateral.
HP and PCP finance options, while often grouped with unsecured loans, actually work similarly to secured loans. In these cases, the finance provider owns the vehicle until all payments are made, including any final option-to-purchase fee.
If you’re unable to keep up with payments, they can repossess the car.
Unsecured loan
An unsecured loan, on the other hand, doesn’t require any asset as security.
With a personal car loan, for example, you use the funds to buy the car outright, giving you full control and ownership from the start without any collateral tied to the agreement.
Since there’s no asset backing the loan, unsecured loans often come with higher interest rates compared to HP or PCP products.
This higher rate helps offset the lender’s increased risk in offering a loan without security.
Are car loans secured or
unsecured loans?
When it comes to borrowing, loans generally fall into two categories: secured and unsecured. Understanding the difference between them can help you choose the option that best fits your needs and comfort level. Secured loans involve using an asset as collateral, while unsecured loans don’t require anything as security—but each type comes with its own pros and cons. Here’s a closer look at what each option means for you.
Secured loan
A secured loan is one where the lender uses an asset you own, like a property, as security. If you can’t keep up with your payments, the lender has the right to reclaim the asset.
Mortgages are a common example of secured loans, where the home itself serves as collateral.
HP and PCP finance options, while often grouped with unsecured loans, actually work similarly to secured loans. In these cases, the finance provider owns the vehicle until all payments are made, including any final option-to-purchase fee.
If you’re unable to keep up with payments, they can repossess the car.
Unsecured loan
An unsecured loan, on the other hand, doesn’t require any asset as security.
With a personal car loan, for example, you use the funds to buy the car outright, giving you full control and ownership from the start without any collateral tied to the agreement.
Since there’s no asset backing the loan, unsecured loans often come with higher interest rates compared to HP or PCP products.
This higher rate helps offset the lender’s increased risk in offering a loan without security.
Are car loans secured or
unsecured loans?
When it comes to borrowing, loans generally fall into two categories: secured and unsecured. Understanding the difference between them can help you choose the option that best fits your needs and comfort level. Secured loans involve using an asset as collateral, while unsecured loans don’t require anything as security—but each type comes with its own pros and cons. Here’s a closer look at what each option means for you.
Secured loan
A secured loan is one where the lender uses an asset you own, like a property, as security. If you can’t keep up with your payments, the lender has the right to reclaim the asset.
Mortgages are a common example of secured loans, where the home itself serves as collateral.
HP and PCP finance options, while often grouped with unsecured loans, actually work similarly to secured loans. In these cases, the finance provider owns the vehicle until all payments are made, including any final option-to-purchase fee.
If you’re unable to keep up with payments, they can repossess the car.
Unsecured loan
An unsecured loan, on the other hand, doesn’t require any asset as security.
With a personal car loan, for example, you use the funds to buy the car outright, giving you full control and ownership from the start without any collateral tied to the agreement.
Since there’s no asset backing the loan, unsecured loans often come with higher interest rates compared to HP or PCP products.
This higher rate helps offset the lender’s increased risk in offering a loan without security.
What is the best car financing option for you?
Personal car loan
Personal Contract Purchase
Hire purchase
Personal contract hire
Typical length of agreement:
Usually 1-7 years
Usually 1-5 years
Usually 1-5 years
Usually 1-4 years
Initial deposit required?
No
Usually but not always
Usually but not always
Usually but not always
Who owns the car?
You, although you will still need to repay the debt
The lender or finance company unless an optional final balloon payment is made
The lender or finance company until final repayment plus option-to-purchase fee is made
The lender or finance company, always
Mileage restrictions
No
Yes
Sometimes
Yes
What is the best car financing option for you?
Personal car loan
Personal Contract Purchase
Hire purchase
Personal contract hire
Typical length of agreement:
Usually 1-7 years
Usually 1-5 years
Usually 1-5 years
Usually 1-4 years
Initial deposit required?
No
Usually but not always
Usually but not always
Usually but not always
Who owns the car?
You, although you will still need to repay the debt
The lender or finance company unless an optional final balloon payment is made
The lender or finance company until final repayment plus option-to-purchase fee is made
The lender or finance company, always
Mileage restrictions
No
Yes
Sometimes
Yes
What is the best car financing option for you?
Personal car loan
Personal Contract Purchase
Hire purchase
Personal contract hire
Typical length of agreement:
Usually 1-7 years
Usually 1-5 years
Usually 1-5 years
Usually 1-4 years
Initial deposit required?
No
Usually but not always
Usually but not always
Usually but not always
Who owns the car?
You, although you will still need to repay the debt
The lender or finance company unless an optional final balloon payment is made
The lender or finance company until final repayment plus option-to-purchase fee is made
The lender or finance company, always
Mileage restrictions
No
Yes
Sometimes
Yes
Key points to consider before getting a car loan
You will need a very good credit score to access the best deals and the monthly repayments can be higher than other car finance repayments and the interest rate could be higher, too.
Overall, a car loan can be a more straightforward way to purchase a car outright – you’ll own it from the start – but traditional car finance (HP, PCP) could be a more affordable option in the long run, despite the initial upfront deposit and inherent risk of repossession if you don't keep up your repayments.
Still unsure what sort of finance is right for you? Read our guide to car finance.
No deposit needed, simply borrow the car amount
Own the car outright
(although you still need to repay the debt)
No mileage restrictions
You’re not tied in to the dealer or manufacturer
Key points to consider before getting a car loan
You will need a very good credit score to access the best deals and the monthly repayments can be higher than other car finance repayments and the interest rate could be higher, too.
Overall, a car loan can be a more straightforward way to purchase a car outright – you’ll own it from the start – but traditional car finance (HP, PCP) could be a more affordable option in the long run, despite the initial upfront deposit and inherent risk of repossession if you don't keep up your repayments.
Still unsure what sort of finance is right for you? Read our guide to car finance.
No deposit needed, simply borrow the car amount
Own the car outright
(although you still need to repay the debt)
No mileage restrictions
You’re not tied in to the dealer or manufacturer
Key points to consider before getting a car loan
You will need a very good credit score to access the best deals and the monthly repayments can be higher than other car finance repayments and the interest rate could be higher, too.
Overall, a car loan can be a more straightforward way to purchase a car outright – you’ll own it from the start – but traditional car finance (HP, PCP) could be a more affordable option in the long run, despite the initial upfront deposit and inherent risk of repossession if you don't keep up your repayments.
Still unsure what sort of finance is right for you? Read our guide to car finance.
No deposit needed, simply borrow the car amount
Own the car outright
(although you still need to repay the debt)
No mileage restrictions
You’re not tied in to the dealer or manufacturer
Calculate monthly car loan payments
Calculate monthly car loan payments
Calculate monthly car loan payments
The world of car finance can be a confusing one – but we’re here to help simplify things. Use our car finance calculator to help you decide whether car finance could be a good option for you, without affecting your credit rating. The calculator will give you a good idea of what your monthly payments could look like based on how much you’re looking to borrow.
Don’t worry, you’re not committing to anything; this tool is simply a useful guide to help you figure out a budget that suits you best before you complete a full application for car finance.
The world of car finance can be a confusing one – but we’re here to help simplify things. Use our car finance calculator to help you decide whether car finance could be a good option for you, without affecting your credit rating. The calculator will give you a good idea of what your monthly payments could look like based on how much you’re looking to borrow.
Don’t worry, you’re not committing to anything; this tool is simply a useful guide to help you figure out a budget that suits you best before you complete a full application for car finance.
The world of car finance can be a confusing one – but we’re here to help simplify things. Use our car finance calculator to help you decide whether car finance could be a good option for you, without affecting your credit rating. The calculator will give you a good idea of what your monthly payments could look like based on how much you’re looking to borrow.
Don’t worry, you’re not committing to anything; this tool is simply a useful guide to help you figure out a budget that suits you best before you complete a full application for car finance.
Car loans FAQs
Car loans FAQs
Can I get a car loan if I’m unemployed?
Can I get a car loan if I’m unemployed?
Can I get a car loan if I’m unemployed?
How do I get a car loan?
How do I get a car loan?
How do I get a car loan?
Can I get a car loan for a private sale?
Can I get a car loan for a private sale?
Can I get a car loan for a private sale?
What happens if I don’t pay my car loan?
What happens if I don’t pay my car loan?
What happens if I don’t pay my car loan?
Can I pay off my car loan early?
Can I pay off my car loan early?
Can I pay off my car loan early?
Who is eligible for a car loan?
Who is eligible for a car loan?
Who is eligible for a car loan?
How quickly can I get a car loan?
How quickly can I get a car loan?
How quickly can I get a car loan?
What do I need to apply for a car loan online?
What do I need to apply for a car loan online?
What do I need to apply for a car loan online?
NEWS Aug 2024: FCA announcement on discretionary commission arrangements (DCAs)
Oodle customers are not impacted