Car Loans That Get Cheaper When You Pay on Time
A fair, flexible car loan from Rate Drop™. Make your payments on time and your interest rate automatically drops — reducing your monthly repayments.
Need a car now and want simple monthly repayments?
Need a car loan you can trust? With Rate Drop™, you can buy a new or used car from any dealer or private seller — with no deposit, no balloon payment and no guarantor.
- Borrow from £1,000 to £5,000
- Terms from 12 to 36 months
- Quick online application
- Open Banking for a quick, fair affordability check
- UK-based support
How Rate Drop™ works
Every customer starts with the same fixed APR. Make six consecutive on-time payments and your APR automatically drops for the rest of your term.
For loans over 12 months, you can receive two Rate Drops™ — rewarding consistent, on-time payments with lower costs.
Why choose a personal car loan instead of dealer finance?
- You own the car from day one. No finance company restrictions.
- No deposit or balloon payment. Just clear fixed monthly repayments.
- Buy from any dealer or private seller. New or used.
- Enjoy Rate Drop™. Make six on-time payments and your rate drops automatically.
Eligibility checklist
Before you apply for your car loan, check you meet the following criteria:
- Are 18 or over and live in the UK
- Have a regular income paid into a UK bank account
- Can afford the repayments after your normal bills
- Are not currently bankrupt or in an active IVA or DRO
We’ll verify your identity, run a credit check and assess affordability. We also use read-only Open Banking access to view your recent transactions and essential spending — helping us make fair, responsible lending decisions quickly and securely.
Things to consider when budgeting for a new car
When planning to buy a car — whether new or used — it’s important to think beyond the purchase price. Here are a few key costs to include in your budget:
Vehicle Tax
Most cars on UK roads need to be taxed before you can drive them.
Car Insurance
All drivers must have insurance, and costs vary based on your age, experience, and level of cover.
Tyres
Check that the car’s tyres are road-legal. Replacements can be a significant early expense.
Tools and spare parts
Keeping basic tools and essentials can save time and money if you break down.
MOT certificate
Most vehicles over three years old must have a valid MOT to be road-legal.
Breakdown cover
This can give peace of mind in case something goes wrong on the road.
Common ways to use a Rate Drop™ car loan
Smart ways to use your Rate Drop™ Car Loan
- First car or family runaround
- Replacing an unreliable car
- Buying from a private seller
- Covering insurance, tax, and initial repairs
Whatever you choose, your Rate Drop™ loan is designed to make car ownership simpler and more affordable over time.
Looking to borrow for something other than a car? Take a look at our Home Improvement Loans or Debt Consolidation Loans. Already a customer? You might be eligible for a Top Up Loan.
Apply Today