Car Loan

A car loan is a secured loan specifically designed for purchasing a new or used vehicle. In this arrangement, a lender—such as a bank, credit union, or financial institution—provides funds to cover the cost of the car. The borrower then repays the loan in fixed monthly installments (EMIs), which include both principal and interest, over a predetermined tenure.

Car loans typically require a down payment, while the remaining amount is financed. The interest rate may be fixed or variable, depending on the lender’s terms. Since the vehicle itself serves as collateral, the lender can repossess it if the borrower fails to repay the loan.

Car loans help individuals buy vehicles without needing full upfront payment, making ownership more accessible and budget-friendly. Borrowers can choose loan tenure, EMI amount, and repayment terms based on their financial comfort.