Financing a New Vehicle?
The most popular method of financing a car purchase is a personal loan, which is used by approximately one third of car buyers.
There is a bewildering choice of car finance: Hire Purchase, Personal Contract Purchase (PCP), Personal Contract Hire (PCH), dealer finance or personal loans.
Why are personal loans so popular? A personal loan gives you instant vehicle ownership and provides the best value if you keep your car for a longer period of time. And if you don’t want annual mileage restrictions. You can seek out the most suitable finance for your circumstances, comparing interest rates and time periods. You will then have cash in your pocket to drive a hard bargain to buy the car you really want!
If you are highly creditworthy you may be able to borrow using an unsecured personal loan. But maybe your credit score isn’t so good and you want to borrow over a longer time period to keep the monthly payments down? If you are a homeowner you can apply for a secured vehicle loan on your property.
We’ve put together some frequently asked questions to help you make an informed decision. Click on the links below for more information.
What are secured vehicle loans?
A secured loan is a second charge mortgage. It uses your home as security for the repayments. If repayments are defaulted on, as the borrower, you could lose your home. Secured loans are also referred to as ‘homeowner loans’ or ‘second charge mortgages’, as this type of loan ranks after your mortgage for security. Secured loans are regulated agreements by the Financial Conduct Authority.
How do secured loans differ from unsecured loans?
Secured loans are secured by the lender on your home. If you fail to maintain your monthly payments, your home may be at risk. Therefore lenders will often accept an application for a secured loan which they may decline for an unsecured loan. So lenders can be more flexible with secured loans and will usually offer larger sums over longer periods. Unsecured loans do not place your home at risk.
Qualifying for a secured vehicle loan
In order to apply for a secured loan with Arrow Loans you must fit our criteria:
- Aged 21-68
- A homeowner occupier
- Live in England or Wales
- Be able to afford the repayments comfortably from normal income
Applying for a secured vehicle loan?
We are dedicated to being open and honest about the procedure for getting a secured loan through us. Therefore we have put together a guide which outlines our loan application process to help you understand every aspect.
How much can I borrow?
Secured loans for homeowners through Arrow Loans are available for people who are looking to borrow up to £250,000.
How long is the repayment term?
The amount borrowed can be customised to whatever suits you best. Arrow Loans offers secured loan repayments up to 180 months (15 years), which means the loan can be repaid over a term whereby you find the monthly repayment amount affordable.
Is there a lower interest rate with a secured loan?
Secured loan interest rates are usually comparably lower than those of an unsecured loan. This is because secured loans can be taken out over a longer period of time. The amount of borrowing and the term length influences the interest rate.
Are there any fees to pay?
We are committed to telling our customers about our fees. There are NO fees or costs payable before the loan is issued. When your loan is issued there will normally be an arrangement fee of up to £495 added to your loan amount. This fee will vary as it is intended to cover our costs, such as legal and valuation, on a case by case basis. The amount you repay is clearly stated on your loan quote.
Can the loan be paid off earlier than agreed?
Yes! Our loans are regulated by the Financial Conduct Authority so you can settle early, overpay and make lump sum payments. This can reduce the amount of interest paid on the loan, ultimately saving you money.
Our representative rate for homeowner loans is 11.3% APRC variable – at least 51% of successful applicants receive this rate