How does a car loan work?

A personal loan can be used to buy a car. With a loan you can spread the cost with monthly payments to suit your budget and you will own the car from the moment you drive away.

Check your eligibility

  • Check if you're eligible to apply for a loan by answering a few questions and if pre-approved, get a personalised rate - with no effect on your credit score.  
  • No need to re-type your answers - as long as nothing's changed, you don't need to type these details in again.
  • Apply securely online to get a decision.
  • If approved, you should have the money in your account in 2 hours, or sometimes up to three working days.

The amount of lending and the interest rate offered to you, depends on an assessment of your personal circumstances.

Check your eligibility

MBNA personal loans are provided exclusively by Lloyds Bank plc. MBNA Limited act as a credit broker and not the lender.

Things to think about before using a loan to buy a car

Do your sums and research cars

  • Review your income and outgoings. This will help you work out what you could afford to pay back each month.
  • Compare the prices of similar cars so you don’t pay more than you need to.
  • It’s also a good to get insurance quotes and check car tax before you buy.

What to think about if you’re buying a car using credit

  • You’ll need to repay the loan even if you still have the car or not.
  • Only agree to a personal loan if you’re confident you can keep up repayments.
  • Consider all borrowing options available.

What happens now

Check your eligibility

With our eligibility checker you get:

  • to find out if you're eligible to apply for a loan.
  • if pre-approved, get your personalised rate with no effect on your credit score.

What do we need to know about you?To help us get to know you a bit better, here's a few things we'll need from you: your personal and contact details, details about your money coming in and going out and your employment details. Don't worry, as long as nothing's changed, there's no need to type these details again if you go on to apply.

Get a decision

Go on to apply and you'll get an instant decision.

Get the money in your bank

If approved, you should have the money in your account in 2 hours, or sometimes up to three working days.

You can apply for a loan if:

  • You are age 18 or over.
  • You’re a UK resident (except for the Channel Islands and Isle of Man).
  • You’re not in full-time education. 
  • You’re in paid employment or have a regular income.
  • You’ve not been declined for credit in the last month.
  • You don’t have a history of bad credit.
  • You are not applying for any of these reasonsLoans won't be provided for speculative purchases (gambling, investments and share purchases), any illegal purposes, business-related purposes, purchase/lease of land or property, either full or part purchase (including deposit), timeshares/holiday clubs

Information needed if applying

If you get an offer and decide to apply for a loan today, you'll also need your UK current account details.

We might also ask you to confirm your identity. For this, you'll need a smartphone or tablet to take a selfie. You’ll also need to take a photo of your UK passport or driving licence.

Frequently asked questions

  • All of our loans are unsecured, meaning they’re not secured against anything such as the vehicle or your home.

  • Getting a personalised quote, telling you what your repayments would be, doesn’t affect your credit score – we’ll only do a ‘soft search’ then. If you go on to apply, we’ll then do a full credit check, called a ‘hard search’. This helps us understand if you’re likely to have any problems paying the loan back.

  • When you apply for a car loan, we’ll tell you how much your monthly repayments will be. This includes the interest and is a fixed amount until you pay the loan back. The repayments will start the month after your agreement begins. We’ll take them by Direct Debit on a date that suits you.

    If you want to, you can make extra payments with no charge. If you pay the loan off early, we may charge you up to 58 days’ interest.

    If you miss a repayment, your account may be passed onto our collections team and you may be charged £25. And if more repayments are missed, you may be charged more.

  • With a car loan, we’ll lend you the money up front and you’ll pay the seller directly. This can be through a dealership or a private seller and you’ll own the car straight away.

    With car finance, we’ll pay the dealer directly, so you don’t have to. Depending on the type of car finance you take out, you’ll only own the car at the end of the term.

    Both can be good ways to pay for a car. Compare overall cost, interest, fees and term to decide which is the best option for you.

  • Our eligibility checker is an online tool you can use to tell us a bit about you and your circumstances. By answering a few questions, you can:

    • find out if you're eligible to apply for a loan.
    • if pre-approved, get a personalised rate.
    • relax - as long as nothing's changed, you don't need to re-type any of the details you've already given us.

    All of this, before you apply and with no effect on your credit score.