How does a car loan work?

A car loan is a personal loan you can use to pay for your new car. With a car loan, you can spread the cost of the car into monthly repayments to suit your budget. Buying a car with a personal loan means it will be yours from the moment you drive away.

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

Features of a car loan

3.4% APR representative for loans of £7,500 to £25,000 over 1 to 5 years.

  • No surprises, with fixed monthly payments.
  • Apply online in minutes and get an instant decision.
  • Apply for between £1,000 and £25,000.
  • Choose to make your monthly repayments over 1 to 7 years.

If you’re approved, you should have the money in your account within 24 hours. In some cases it may take a bit longer, but no more than 5 working days.

Car loan calculator

Use our calculator to get an idea of what your monthly repayments could be. Note: this calculator is for illustrative purposes only. If you apply, you may be given a different rate depending on your circumstances.




Monthly repayments


Total amount repayable


Illustrative APR


The rate you are offered may be different to the rate shown in the calculator.

That is because it is based on your personal circumstances, how much you want to borrow and how long you want to pay it back.

Apply now to get your personalised rate

Get started

Representative example

You could borrow £10,000 over 48 months with 48 monthly repayments of £222.89. Total amount repayable will be £10,698.72. Representative 3.4% APR, annual interest rate (fixed) 3.35%.

The representative APR applies to loans of £7,500 to £25,000 over 1 to 5 years. Other terms and loan amounts are available at different rates. The maximum APR you could be offered is 29.9% APR.

The representative APR is the rate that at least 51% of people are expected to receive when taking out a loan within the stated amount and term range.


Apply online with ease

Apply online for an MBNA car loan in minutes and get an instant decision.

Repayment holidays

You could apply for up to 2 repayment holidays each year, subject to approval. Just be aware, interest is still charged for the months you don’t make payments. This means you’ll pay more interest overall and the loan term will increase.

Quick access to your cash

If your loan is approved, you could have the money within 24 hours. In some cases, it may take a bit longer, but no more than 5 working days.

Things to think about before you buy a car

Why buy using a car loan?

  • You don’t need to pay a deposit for the car to get a car loan.
  • You’ll own the car outright, so you can sell it at any point.
  • No restrictions on where to buy your car or the model you pick.
  • Car finance often has mileage limits – there’s no limit with a car loan.

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.

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 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.

You can apply for a car loan if:

  • You’re aged 18 or over.
  • You’re a UK resident (excluding 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 will not 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..

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. However, 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.