Car Loan

A car loan is a secured loan provided by banks, credit unions, or auto finance companies to help individuals or businesses purchase a vehicle. The vehicle itself typically serves as collateral, meaning the lender can repossess it if the borrower fails to make timely payments. Car loans are repaid in monthly installments (EMIs), which include both the principal amount and interest.

Borrowers can choose the loan tenure—usually between 1 to 7 years—based on their financial comfort. Interest rates may be fixed or floating, depending on the lender. Many lenders also require a down payment, which reduces the overall loan amount and monthly EMI.

Car loans are popular because they make vehicle ownership more affordable, allow buyers to spread the cost over time, and often come with competitive interest rates due to the secured nature of the loan.