Types of Car Loans

> Secured Car Loans

Also called homeowner loans, these are a type of personal loan usually provided by a bank or building society that uses your property (i.e. your home) as collateral. The most you can borrow depends on the value of the equity you have in your property.
The advantage of secured loans is that they generally have lower interest rates. Just keep in mind that you are placing your property at risk should you fail to keep up with your repayments.

> Unsecured Car Loans

Unlike secured loans, unsecured loans don’t require you to put up property as collateral, making this type of loan available to more people (i.e. tenants and students). The loan company will conduct a credit check to assess your level of risk so it’s important to have a good credit history in order to avail of this option. The most you can borrow is usually less than compared to a secured loan and interest rates will be higher.

> Flexible Loans

Flexible loans have variable monthly payments and no fixed repayment period, thus you can opt to settle your loan early and save yourself some of the amount you would have paid on interest. Just remember that flexible loans may also have considerably higher interest rates.