Car Loan

A car loan is a type of personal loan designed to help individuals finance the purchase of a new or used vehicle. The borrower agrees to repay the loan amount, along with interest, in monthly installments over a specified period, typically 3 to 7 years. The vehicle serves as collateral for the loan, meaning the lender can repossess the car if the borrower fails to make the required payments. Car loans may come with different interest rates and terms based on the borrower’s credit score and the vehicle's value. Some common options include secured and unsecured loans, with secured loans offering lower interest rates due to the collateral.