Car Loans

What is a car loan?

Car loans are similar to other personal loans and can be used to cover the cost of a new or used vehicle. Once you receive your loan, you can put the money towards a new or used car, with repayment rates available to suit your requirements.

How do car loans work?

Financing a car works in two ways. You can either apply for finance with a registered car seller at the time you buy the car and then pay back the loan over an agreed period of time, or apply for a personal loan and receive the money before you shop for a vehicle of your choosing.

By paying for the car upfront with a personal car loan, you’ll own the vehicle outright and avoid paying for extras such as excess mileage charges over time, as you may have done should you lease the vehicle from a garage.

However, the monthly payments on your personal car loan could be higher than some other options, so you should be sure you can afford to cover the monthly repayments before you apply.

Am I eligible for a car loan?

Your eligibility depends on the requirements set out by the lender and will depend on your financial history and current situation.

Is a car loan a good idea?

Our loans can help you afford a new vehicle, whether you’re a new driver, need an upgraded model or simply want a decent run-around to commute to work. It’s very important that, before you apply, you look into how much you can comfortably afford to pay back each month. A loan can be a good way of building credit, improving your rating as well as your chances of being accepted for better rates in the future.

Applying for a car loan vs leasing

Applying for a car loan is essentially the same as applying for a personal loan.

There are other options to consider when it comes to taking on a loan to purchase a car. You could seek a PCP finance agreement with the dealer where you take on a loan via their provider. At the end of your agreement, you have the choice of handing the car back, buying it outright for the remainder of the loan, or swapping it for an even newer model.

You could also consider leasing a car, which may require an initial deposit. Leasing often has lower monthly repayments than a financing agreement, as you’ll only ever cover the depreciating value of the vehicle, rather than the whole cost. The difference is that an initial upfront payment is usually required to agree such terms.

Commonly asked questions about car loans

Have a question before you apply? We’ve answered some of the most common queries below:

How much can I borrow?

You can apply for a loan between £1,000 and £100,000 - covering a wide range of vehicle options.

How long are the repayment terms?

We strive to be flexible, with repayment terms from one to 30 years available.

What are the interest rates?

These vary depending on the lender you select, but typically, homeowner interest rates start from 3.37%.

How long will it take?

You’ll be able to find out if you’re suitable for a loan instantly online. If your application is successful, the money could be with you within 1-2 days.

Are there any loan fees?

If your loan is secured, there may be a broker fee of 12.5% applied - this is capped up to £3,995 for secured car loans. We do not charge fees on unsecured car loans.

Applying for a car loan with Norton Finance

We help people whatever their financial situation and will try to find a car loan for you even if you are retired or self-employed. We also help new drivers who may need help purchasing their first car, and those on low-income salaries and apprenticeship schemes who still need a vehicle to get to work and back.