Got your heart set on your dream car? Or perhaps you just need a little more space in the back?
A personal loan from Sainsbury’s Bank could help you cover the cost of a new or used car. We offer loans for cars ranging from £1,000 to £40,000 if you’re a Nectar member, non-Nectar members can borrow up to £25,000.
Why choose Sainsbury’s Bank for your car loan?
Here’s everything you need to know about car loans with Sainsbury’s Bank:
From 6.2% APR representative for Nectar members when you borrow £7,500 - £15,000 for 1-5 years
You can pay back your loan over 1-7 years (depending on your loan value) with manageable, fixed monthly instalment
You can borrow between £1,000 - £40,000 if you’re a Nectar member, non-Nectar members can borrow up to £25,000
No application or arrangement fee
You could get your money in as little as 2 hours, or the next business day, if you’re accepted
Our loan application is quick and easy to complete, you can sign your agreement online, and upload any documents we might need.
How do car loans work?
Car loans let you borrow a set amount of money to finance a new or used car purchase. The loan amount, plus interest, will then be repaid over a period of time with monthly repayments.
Car loans are a type of personal loan, also known as an unsecured loan, which isn’t tied to one of your assets – like your home.
If you wish to get a car loan, you’ll need to work out how much you want to borrow and for how long. Our handy loan calculator can help give you an estimate of:
Monthly loan repayments
Total amount to repay
Annual interest rate
If you’re successful with your application, you’ll need to sign your loan agreement, then your loan amount will be paid into your bank account. Your repayment schedule will be set, so you’ll know exactly what you need to pay each month.
How much can I borrow?
Our car loans calculator can steer you in the right direction. You can quickly work out what your monthly payments could be – and how much you’ll repay in total.
In just a few clicks, you can find out your interest rate and how likely you are to be accepted – without harming your credit score.
All quotations given are for illustrative purposes only. Credit is subject to status.
Things to consider when buying a car
Ways to pay for a car
Taking out a loan for your car is a helpful way to cover the costs of purchasing a used or new car. You can take out a bank loan to pay for your car, or if buying from a dealership, you may be offered car finance directly.
Securing a loan means you become a cash buyer, which often helps with any negotiations. There will be no set up fees and once you’ve paid off your loan, you own the car at the end.
Find tips on buying a car.
Personal contract purchase
Other ways you can buy a car include personal contract purchase, which you can arrange if you choose to buy through a dealership. This usually involves paying a deposit for the car followed by a series of regular monthly instalments.
You won’t fully own the car until you make the final personal contract purchase ‘balloon’ payment. A balloon payment is when you pay more at the end of your loan term than earlier monthly payments. It allows you to reduce your monthly fixed payment to an affordable amount by agreeing to pay more when your loan comes to an end.
Leasing your car
You can also lease your car, which means you agree to a long-term rental where you pay a monthly fee in exchange for a car. The payment is fixed but you never own the car and when the lease is up, you return it and you can upgrade to a new model.
If you are looking for a car upgrade, trading in your old car against a new one is a popular option. You are effectively part-exchanging your existing vehicle for the new one. The dealership will take the value of your old car off the price of your new one. A loan can then be used to pay the difference.
Running costs of your car
It’s easy to get caught up in the purchase price, but you might also want to consider typical car running costs.
Age and claim history are among the many factors that can make car insurance one of the biggest expenses. For more information, check out our car insurance options.
Different types of cars have different tax rates, you can check the GOV.UK tax rates table for an up-to-date list.
Cars more than three years old need an MOT test every year, the maximum cost that test centres can charge can be found on GOV.UK .
Regular health checks on your car can save you both trouble and money. Read our guide for tips on car maintenance.
Miles Per Gallon (MPG)
MPG is the standard measure used to show how many miles a car will travel per gallon of fuel. Choosing a car that offers good MPG or perhaps even an electric or hybrid car, can save you money on fuel over time.
How to apply for a car loan
Applying for a car loan is quick and easy with Sainsbury’s Bank. Just follow these simple steps:
Step 1 – Use our loans calculator
Firstly, use our loans calculator to check how much your loan could cost you. Our tool uses our representative example* to show you what your estimated repayments may be, the total amount you’ll need to repay, as well as what the illustrative APR and annual interest rate could be.
- What you’d like to borrow
- How long you would like your loan repayments to last
- Your Nectar card number if you’re a Nectar member
- Whether it’s a single or joint application
Step 2 – Have your personal details to hand to apply
If the results from our loan calculator work for you, you can start your application. You’ll see a selection of key information and Terms and Conditions to read first. This includes loan eligibility and lending terms. If you’re happy to continue, you can begin.
You’ll be required to enter some personal details to start. It’s worth having this information directly to hand during your application.
You’ll be asked to provide your:
- Name, date of birth and nationality
- Email address and contact number
- Loan purpose – select ‘Car/Bike’
- Home address and residential status
- Marital status and details of any co-dependents
Financial and occupational details are also needed to process your application. This includes:
- Employment status
- Occupation and employer’s name
- Annual income
- Mortgage or rental payments
- Bank details
Step 3 – We will run our credit and approval checks
Once you submit your details, we’ll take the information you’ve given us and conduct our lender checks. We’ll start by checking your application details and running through your credit report.
A soft credit check will happen to begin with, where we’ll take a top-level look at information included in your credit report. This won’t appear on your credit report and isn’t visible to credit agencies.
We’ll then conduct a hard credit check, which will appear on your credit report, and is a much more in-depth look at your financial history.
Step 4 – Receive a decision
If your application is successful and you pass our series of checks, you can sign your agreement online and upload the relevant documents, in order to receive your car loan. Once the loan agreement has been signed, your money will be paid into the bank account that you listed during your application.
If you already have a loan with us, you could potentially borrow more. Explore your options for topping up your loan.
Buying a used car?
Before you purchase, it’s worth thinking about the pros and cons of buying a used car. In our guide, we’ve got some tips that help you decide if buying a used car is the right decision for you.