A personal loan is a common way for people to buy a new vehicle on finance. Personal loans can be taken from banks, building societies and finance companies. The duration of the payment of the loan can vary depending on what you agree beforehand with the loan company. Loans from banks for vehicles can be paid off over a number of years, and will have a fixed rate of interest.
There are two types of loan available, either secured or unsecured. With a secured loan, the finance company or bank will retain ownership of the vehicle until the balance of the loan has been paid off. An unsecured loan means that the buyer is attached to the loan and not the vehicle, meaning that ownership of the vehicle is retained from the beginning. Most unsecured loans are more expensive and will have a higher interest rate than a secured loan.