Car finance calculator with credit score

How your car finance payments were calculated

There are several key factors that went into your car finance calculation:

1. The car price. This is the total price of the vehicle you want to purchase. In your case the car price is £20,000.
2. Your deposit. The amount you put down upfront reduces the amount you need to finance. In your case, your deposit is £2,000, meaning you need to finance £18,000.
3. The finance term. This is how long you'll be making payments, measured in months. You've selected 48 months. Longer terms mean lower monthly payments but more interest paid overall.
4. Your credit score. Your credit score has a huge impact on the APR you'll be offered. With a credit score, you could see an APR of around 0.0%.

How to use this car finance calculator

Our calculator is simple to use:

• Enter the price of the car you want to finance and how much deposit you can put down.
• Choose your preferred finance term (12-60 months).
• Get your credit score from one of the credit reference agencies or from a credit monitoring service.
• The calculator will show you your estimated monthly payment, total interest, and potential savings if you improve your credit score.

How does my credit score influence my car finance APR?

Your credit score is one of the most important factors that car finance lenders look at when determining your APR (Annual Percentage Rate).

With an excellent credit score, you'll typically be offered the lowest APRs, often between 6% and 8%. As your credit score decreases, lenders see you as a higher risk and compensate by offering higher APRs:

• Excellent credit (Band 1): 6-8% APR
• Good credit (Band 2): 9-12% APR
• Fair credit (Band 3): 13-18% APR
• Poor credit (Band 4): 19-25% APR
• Very poor credit (Band 5): 26-30%+ APR

The difference between an excellent and poor credit score can mean paying thousands of pounds more in interest over the life of your car finance agreement.

Tips to improve your credit score before applying for car finance

If your credit score isn't where you'd like it to be, here are some steps you can take:

• Register to vote at your current address. Being on the electoral roll helps lenders verify your identity.
• Check your credit report for errors. You can get free reports from Experian, Equifax, and TransUnion. Dispute any inaccuracies you find.
• Pay bills on time. Payment history is the most important factor in your credit score. Set up direct debits to avoid missing payments.
• Keep credit card balances low. Try to use less than 25% of your available credit limit.
• Avoid multiple credit applications. Each application creates a hard search on your credit file, which can temporarily lower your score.
• Build credit history with Wollit. Our app reports your subscription as a loan repayment to all three credit reference agencies, helping you build positive credit history month after month.

Understanding car finance types

Personal Loan

You borrow a fixed amount from a bank or lender, buy the car outright, and own it immediately. You then repay the loan in fixed monthly instalments.

Hire Purchase (HP)

You pay a deposit and then monthly instalments over an agreed period. Once you've made all payments, you own the car. The car is used as security for the loan.

Personal Contract Purchase (PCP)

Similar to HP but with lower monthly payments. At the end of the term, you can either pay a final "balloon payment" to own the car, return it, or trade it in for a new one.

Wollit helps you build your credit score by reporting your subscription as a loan repayment to Experian, Equifax, and TransUnion. This can help you qualify for better APRs when you're ready to finance your next car.