car loan

A car loan (or auto loan) is a secured installment loan specifically used to purchase a vehicle. The vehicle itself acts as collateral, meaning if the borrower fails to repay, the lender can repossess the vehicle.

The lender provides a lump sum to buy the vehicle upfront.

The borrower repays the loan over a set period—typically 36 to 72 months, though some terms may extend to 84 or even 96 months.

Each monthly payment includes both principal and interest, with ample details like down payment, APR, loan term, and fees influencing total cost.