For buying a car, if you have arranged enough money from own sources and now require smaller amount as a loan, then unsecured car loan is what you are looking for. You can take unsecured car loan for buying any car of any make or model. So, either it is new or used car that you want to buy; unsecured car loans can help you in accessing the rest of the amount.
Unsecured car loan comes without taking any property of the borrower as security. So in taking unsecured car loan, the borrower has no risks at all. Since the lender has no security and his risks have only increased, he approves the loan on seeing that the borrower has sufficient repayment capability. So the income and employment documents play key role in approval of unsecured car loan. Past bank statements are also demanded from the borrower.
For covering risks, lenders take higher interest rate on unsecured car loan. The loan amount approved depends on income, repayment capacity and good credit history of the borrower. Usually lenders approve up to £25000 as unsecured car loan. The repayment duration of the loan is kept shorter ranging up to few years.
A good credit history borrower is most likely to be approved unsecured car loans without delay. May be such a borrower will be charged a comparatively lower interest rate. But in case you have bad credit, lenders are willing to consider you for unsecured car loan, if you are able to assure timely repayment of the loan installments. So take a repayment plan to the lender and know your credit score first. However a bad credit borrower is usually charged further higher interest rate. So be prepared for enhanced interest rate.
You can source unsecured car loan from variety of lenders including the car dealers. Explore different sources for their advantages and apply to a suitable lender. Now that unsecured car loan is in your hand, ensure that you buy car from a reliable dealer. If used car is to be bought, ensure it is mechanical defects free.
By: Simon Peyton