ikano bank

Ikano Bank car loans review

This Swedish bank, owned by the family who founded IKEA, has been serving UK customers for over 20 years and specialises in car finance.

Ikano Bank was launched by IKEA founder Ingvar Kamprad in 1995. It set up its Nottingham headquarters and began offering personal loans to UK customers more than 20 years ago.

More than a third of loans paid out by Ikano Bank are car loans – find out more about what it has to offer, in our review.

warning iconWarning: Late repayments can cause you serious money problems. See our debt help guides.

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Buying a car on finance requires you to commit to monthly payments, so make sure you carefully work out your budget and choose an affordable option. Don’t forget to take into consideration other costs you’ll need to cover, such as road tax, insurance and MOT, before making your final decision. Late repayments will damage your credit score, making it harder to source finance in the future.

Learn more about the different ways you can finance a new or used car purchase.

It’s quick and easy to apply for a car via the Ikano Bank website. Below, we outline the key details.

Key features at a glance

  • Loan terms. Between 1 and 5 years.
  • Loan amounts. Between £1,000 and £15,000.
  • Get a personalised quick quote with no impact on your credit rating.You’ll receive an online quote that has no impact on your credit file, after filling out a few details.
  • Fixed monthly repayments. Monthly repayments are fixed, so you’ll know exactly how much money is due each month, plus how much the loan is going to cost overall. You can also make overpayments with no charge.
  • Quick decision. Ikano Bank completes overnight identity and credit checks, and will email you the result of your application the day after you apply.
  • Quick access to funds. If you’re approved for a loan, Ikano promises to transfer the money into your bank account the next working day.
  • No set-up fees. You’ll pay no fee to take out a loan.
  • Repay your loan early at any time. There’s no charge for repaying your loan early but your settlement figure will include up to 58 days’ interest, in line with the Consumer Credit (Early Settlement) Regulations 2004.

Interest rates are fixed for the duration of your repayment period, however the rate you’re offered will depend on factors like the amount you apply for, the term of the loan, your credit rating and your income. It may differ from the advertised “representative APR”.

Am I eligible for an Ikano Bank car loan?

You should only apply for a Ikano Bank personal loan if you’re certain you can meet the repayment terms, and you meet the following criteria:

  • UK residents over 18 years old (excluding Isle of Man and Channel Islands)
  • An income of at least £10,000 a year
  • A good credit record with no history of country court judgements, debt relief orders, individual voluntary arrangements, defaults or bankruptcies
  • A UK bank account which accepts Direct Debit
  • Not currently under/subject to a power of attorney order

How can I apply?

Ikano Bank says its online application takes two minutes to complete. At this point, you’ll receive a quote that has no impact on your credit score. You’ll need to provide proof of the following:

  • Your ID
  • Your address history for the past three years
  • Your current income and employment details (payslips and bank statements)

What is APR?

If you’re comparing any credit-based products, it won’t be long before you’ll come across the Annual Percentage Rate (APR). This figure is designed to provide an annual summary of the cost of a loan. It takes into account both interest and any mandatory charges to be paid (for example an arrangement fee) over the duration of a loan.

All lenders must calculate the APR of their products in the same way and must tell you the APR before you sign an agreement, so for consumers it can be a handy tool for comparison, alongside other features such as the total amount payable.

Bear in mind, however, that lenders are only obliged to award this rate to 51% of those who take out the loan – the other 49% could pay more. That’s why it’s often referred to as the representative APR.

Frequently asked questions

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