Cheapest Way to borrow money


Are still the cheapest way

Join 100, 000+ subscribers to get our free newsletter packed with tips and advice.

Privacy promise: We will never share your data or spam you.

If you need finance to buy your car, a personal loan from a bank or building society is likely to be the cheapest way of borrowing the money. But remember to look into the pros and cons of personal loans first. To get the facts you need, read on.

Important points to consider

Remember

Make sure the loan isn’t secured against your home, otherwise the roof over your head is at risk if you don’t keep up the repayments.

Shop around for the best interest rate by comparing annual percentage rates (APR). The APR includes interest and all of the lender’s other charges.

Also check the monthly repayment amount and the total amount that you’d end up paying the lender.

Personal loans come with a cooling-off period from either the date you sign the loan agreement or from when you receive a copy of it – whichever is later. If you cancel, you have up to 30 days to repay the capital and interest.

Pros of personal loans

  • Can be arranged over the phone, internet or face-to-face.
  • Can be for the whole cost of the car, or for a part of it.
  • Good fixed interest rate if you shop around and have a good credit rating.
  • You choose the loan period (12, 24, 36 months and so on), but remember – the longer the term the more you pay in interest overall. For example, if you were to borrow £10, 000 over two years at 5.9% APR, the interest cost would be £614. Borrow the same amount over five years and it would be £1, 541.
  • Unlike with other forms of credit, you own the car while paying off the loan so if you got into financial difficulties you could sell it. To be on the safe side, check with the lender that this would be the case before taking out the loan.

Cons of personal loans

Top tip

If you’re planning to borrow just under £3000 or just under £5, 000, it may be worth borrowing a little extra in order to get a cheaper rate.

For instance, the APR for loans of £3, 000-£4, 999 could be 12%, yet as little as 5% for loans of £5, 000-£7, 499.

  • You may need to wait for the money to come through, although some lenders make funds available almost immediately.
  • Personal loans aren’t always the cheapest way of borrowing. Sometimes car dealers offer 0% or very low interest deals to shift their stock, often on a ‘flat rate interest’ basis. But make sure you also ask what the annual percentage rate (APR) is as well, as it includes all other charges as well as the interest. When comparing loans, always focus on the APR and the total amount payable.

Use our loan calculator to work out your repayments

If you are thinking of getting a loan, use our Loan calculator to work out how long it would take to pay it off and how much you’d need to repay each month. You can also compare different rates and lengths of loan.

Interesting facts

  • Automated cash handling is the process of dispensing, counting and tracking cash in a bank, retail, check cashing, payday loan / advance, casino or other business environment through specially designed hardware and software for the purposes of loss prevention, theft deterrence and reducing management time for oversight of cash drawer (till...

Additional information


Cheapest way to transfer money Internationally Globally
Cheapest way to transfer money Internationally Globally ...
The Cheapest Way To Send Money Globally
The Cheapest Way To Send Money Globally
15 cheapest ways to get travel money - MSE
15 cheapest ways to get travel money - MSE
TJie Art TJie Art Hand Painted Mordern Oil Paintings Wall Decor Lily Flower Clouds Home Landscape Oil Paintings Splice 3-piece/set on Canvas
Home (TJie Art)
  • Size:50x70CMx1,20x50CMx2
  • A perfect wall decoration for living room and bed room. Paintings reproduction,Canvas print,stretched with wooden frame on the back. Ready to hang.
  • painted by professional artists with years of oil painting experiences. Hand-painted high quality canvas oil painting. A nice gift for your relatives and friends...
  • Each piece is custom made.
  • Materials/Milieu:high quality Thick Canvas, high quality oil or Acrylic colors.
Cheapest way to ship large items how to save money on
Cheapest way to ship large items how to save money on ...
Cheapest Way To Send Money Online
Cheapest Way To Send Money Online
Cheapest Way to Transfer Money Home From Hong Kong
Cheapest Way to Transfer Money Home From Hong Kong