New car finance needs to spark rise in personal loans
When nearly 60 new registered cars are released at the beginning of next month, it is expected that more personal loans will be taken out to help customers afford the vehicles.
Writing for the Independent, Andrew Hagger from Moneynet.co.uk said that in order to afford a new car, finance choices like a personal loan will become more popular, providing the necessary cash to splash out on an up-to-date vehicle.
Mr Hagger recommended that cheap personal loans with low interest are the best way to go to finance a new car, citing Nationwide's 7.7 per cent deal, available to those looking for a £5,000 to £14,999 borrowing, as the top option at the moment.
Other possibilities include Tesco Personal Finance's 7.9 per cent loan and the YourPersonalLoan.co.uk eight per cent deal, which may be more attractive to those who do not wish to set up a current account with Nationwide, a requirement for their option.
The expert also recommended M&S Money's 8.7 per cent personal loan which comes with a cash back offer of ten per cent, giving the equivalent of a 7.9 per cent deal.
However, Mr Hagger warned: "The potential downside of this offer is that to benefit from the ten per cent interest rebate, your loan must run its full term, so if you're someone who refinances their borrowing when you change your car, it won’t be quite so appealing."
Zero per cent credit taken out by students to fund their way through university may help them believe that going into debt is ok, encouraging them to take up more expensive options such as personal loans, it was recently said.
According to Credit Action, the difference between a student and a personal loan should be better clarified to those attending university in order to help them avoid getting into real debt problems later in life.
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