How much car loan can I afford?

Work back from a monthly repayment you can sustain. A common guide is 10–15% of take-home pay after other debts. £250 a month at 6.9% APR repays about £8,100 over three years, £10,500 over four years or £12,700 over five years. Add any deposit or part-exchange to get your car budget.

Is a personal loan or car finance cheaper?

It depends on the rates you are offered. Compare the APR and the total amount payable, not just the monthly payment. Dealer finance sometimes includes manufacturer deposit contributions; a personal loan lets you buy from any seller and own the car straight away.

What is the total cost of a £10,000 car loan?

At 6.9% APR, about £308 a month over 36 months (£1,100 interest), £239 over 48 months (£1,470) or £198 over 60 months (£1,850). At 9.9% APR the interest rises to about £1,600, £2,150 and £2,720 respectively. These are illustrations, not quotes.

Do I own the car with a car loan?

With an unsecured personal loan you own the car from the day you buy it, because the loan is not tied to the vehicle. With hire purchase (HP) or PCP, the finance company owns the car until you have made the final payment.

Will applying for a car loan affect my credit score?

A full application usually leaves a hard search on your credit file. Many lenders offer an eligibility check that uses a soft search, which other lenders cannot see. Use those first and avoid making lots of applications close together.

Can I pay off a car loan early?

Yes. Under the Consumer Credit Act you have the right to settle a regulated loan early, in full or in part. The lender may charge a limited early settlement fee. Ask for a settlement figure before you decide.

Car loan affordability calculator: how much can I borrow?

Whether you borrow through a bank personal loan or dealer finance, the safest way to size a car loan is to start with the monthly repayment you can comfortably make and work back to the loan amount. Enter your salary and any existing commitments below to see an estimated repayment and borrowing figure, then use the tables to compare terms and rates. No credit check, no signup.

Reviewed by: Oliver Burton, Editor · Last updated: 09 October 2026

Your affordability result

Comfortable

Recommended max monthly payment

£239

Estimated max car budget

£10,014

Estimated finance amount: £10,014
Total interest: £1,474
Total repayable: £11,488

Based on your income and 10% affordability, you could put around 239 per month towards a car. Over 48 months at the rate you entered, that supports a finance amount of about 10014. With your deposit, your total car budget is approximately 10014. This is an estimate only—actual offers depend on lender criteria.

What to do next

Compare product shapes with the PCP vs HP calculator or refine instalments in the car finance calculator.
Check salary-band examples on the affordability by salary UK hub.

Estimates only — not a lending decision or financial advice. We are not a lender or broker. FCA-regulated partners handle quotes. We may earn a commission if you follow sponsored links.

Disclaimer

This calculator is for estimation only. It is not financial advice and does not represent a lending decision. Your actual affordability and car finance options in the UK depend on your circumstances and the lender's criteria.

Step 1: set a repayment you can afford

Take your monthly take-home pay, subtract existing loan and card repayments, then apply a share to the car. Many UK guides suggest 10–15% for the loan repayment alone. For example, a £35,000 salary gives about £2,390 a month take-home (2026/27 tax and NI, standard tax code). At 10% that is about £239 a month; at 15% about £359.

Step 2: turn the repayment into a loan amount

Monthly repayment	3 years	4 years	5 years
£150	£4,900	£6,300	£7,600
£200	£6,500	£8,400	£10,100
£250	£8,100	£10,500	£12,700
£300	£9,700	£12,600	£15,200
£400	£13,000	£16,700	£20,200

Amount borrowed at 6.9% APR, rounded to the nearest £100. Your rate may differ.

Step 3: check the total cost

Longer terms make the monthly figure smaller but the total bigger. Borrowing £10,000:

Term	6.9% APR monthly	6.9% total interest	9.9% APR monthly	9.9% total interest
3 years	£308	£1,100	£322	£1,600
4 years	£239	£1,470	£253	£2,150
5 years	£198	£1,850	£212	£2,720

Illustrative, rounded. Excludes any arrangement or early settlement fees.

Personal loan vs dealer finance

	Personal loan	HP	PCP
Who owns the car	You, from day one	Lender until final payment	Lender unless you pay the balloon
Monthly payment	Repays full amount	Repays full amount	Lower: part deferred to balloon
Buy from	Any seller	Dealer or broker	Usually dealer
Mileage limits	None	None	Yes, with excess charges

With HP and PCP you also have a legal right to voluntary termination once you have paid half the total amount payable, as long as you have taken reasonable care of the car. That right does not exist with a personal loan because the loan is not tied to the car. Compare HP and PCP side by side with the PCP vs HP calculator.

Worked example: £28,000 salary, £2,000 saved

Jordan earns £28,000, taking home about £1,970 a month, and pays £100 a month on a credit card. At 12% of the remaining £1,870, Jordan sets a £225 limit. Over four years at 6.9% that repays about £9,400. With the £2,000 savings as a deposit, the car budget is roughly £11,400. If the best rate offered were 9.9% instead, the same £225 would repay about £8,900, so the budget would drop to around £10,900.

Before you apply

Check your credit report with Experian, Equifax and TransUnion for errors.
Use soft-search eligibility checkers to see likely rates without marking your file.
Compare the APR and total amount payable, not just the monthly figure.
Get an insurance quote for the car you have in mind; it can change what you can afford.

More help: APR explained · bad credit · affordability by salary

Frequently asked questions

How much car loan can I afford?: Work back from a monthly repayment you can sustain. A common guide is 10–15% of take-home pay after other debts. £250 a month at 6.9% APR repays about £8,100 over three years, £10,500 over four years or £12,700 over five years. Add any deposit or part-exchange to get your car budget.
Is a personal loan or car finance cheaper?: It depends on the rates you are offered. Compare the APR and the total amount payable, not just the monthly payment. Dealer finance sometimes includes manufacturer deposit contributions; a personal loan lets you buy from any seller and own the car straight away.
What is the total cost of a £10,000 car loan?: At 6.9% APR, about £308 a month over 36 months (£1,100 interest), £239 over 48 months (£1,470) or £198 over 60 months (£1,850). At 9.9% APR the interest rises to about £1,600, £2,150 and £2,720 respectively. These are illustrations, not quotes.
Do I own the car with a car loan?: With an unsecured personal loan you own the car from the day you buy it, because the loan is not tied to the vehicle. With hire purchase (HP) or PCP, the finance company owns the car until you have made the final payment.
Will applying for a car loan affect my credit score?: A full application usually leaves a hard search on your credit file. Many lenders offer an eligibility check that uses a soft search, which other lenders cannot see. Use those first and avoid making lots of applications close together.
Can I pay off a car loan early?: Yes. Under the Consumer Credit Act you have the right to settle a regulated loan early, in full or in part. The lender may charge a limited early settlement fee. Ask for a settlement figure before you decide.

Sources & notes

Our calculators and guides draw on publicly available UK guidance. We review content periodically but do not guarantee that external sources remain unchanged. See our about page for how we use these tools.

MoneyHelper – How to find the right way to buy a car
General guidance on budgeting and car finance options in the UK.
MoneyHelper – Work out your budget
Household budgeting principles used alongside affordability rules of thumb.
FCA – Consumer credit and your rights
Regulatory context for regulated car finance agreements.
FCA Handbook – CONC 5.2A (creditworthiness and affordability)
How FCA-regulated lenders must assess affordability (illustrative reference).
Black Horse – Car finance (sample lender information)
Example of how a major UK motor-finance provider describes its products.
Santander – Car finance (sample lender information)
Example lender product information; rates and criteria vary by provider.

Compliance notes

Car Affordability UK is not authorised or regulated by the Financial Conduct Authority (FCA). We do not provide regulated financial advice, credit broking or lending.
Calculator outputs are illustrative estimates based on the inputs you provide and published third-party guidance. They are not quotes, offers of credit or lending decisions.
FCA-regulated lenders apply their own affordability assessments, which may differ from the percentage rules of thumb used on this site. Always check formal terms before signing any agreement.
We may earn commission if you follow links to third-party finance comparison services. This does not affect how our calculators work or how content is reviewed.