An affordable option for a car loan with bad credit
Generally speaking, you need a good credit score in order to get a loan for a car. However, we’ve partnered up with a specialist funder who can offer a Hire Purchase agreement that won’t take your credit score into account, so long as the amount is under £25,000 over 5 years or less. They will still conduct a credit search, however this is more to check your identification is correct and for recent CCJ’s or bankruptcy.
This HP car loan has an APR of 29.9%. It’s important to note that although you can pay this off over 5 years, making the monthly payments smaller, the higher interest rate will mean you’re paying much more interest than if you take the loan out for less time. We’ll make sure to go through all of your options and help you figure out what is the most affordable method of payment for you.
What is a Hire Purchase loan?
A Hire Purchase agreement (Or HP) is a finance agreement, NOT a lease. The main difference being that you actually own the vehicle at the end of the contract; you don’t need to give it back.
You will make a series of fixed monthly payments for between 1 and 5 years (with 5 being the maximum allowed for this no credit score loan). Once you make the final payment, the vehicle is yours to keep with nothing further left to pay. You can read more about a Hire Purchase loan here.
What you will need to get a car loan without a credit search
In order to qualify for this finance method, you will need evidence of;
- 3 months of bank statements. This shows you have the ability to pay the monthly installments.
- A utility bill dated within the last 3 months. This gives the finance house evidence of where you live.
- A copy of your driving licence. This proves you’re legally able to drive the vehicle and to match your signature as proof of identification.
You’ll also need to have an ‘informal chat’ with the funder in order for them to assess your reliability for the loan.
It’s important to note that even without the use of your credit score, a credit check will still take place. This is to check for CCJs or bankruptcy within the last 6 months. If you have either of those shown on your record, you will not be approved for this type of loan.