A car loan is a type of financial product offered by banks or financial institutions to help individuals purchase a car. It is a secured loan, where the car itself serves as collateral for the loan. Car loans are a popular form of consumer loan, allowing people to buy a car without having to pay the full amount upfront.

• Loan Amount: The loan amount provided by the lender is typically a percentage of the car’s on-road price, including registration, insurance, and other charges.
• Repayment Terms: Car loans come with fixed repayment terms, usually in the form of equated monthly installments (EMIs) spread over a specific period, which can range from a few months to several years.
• Interest Rates: The interest rates on car loans can be either fixed or floating, depending on the lender’s policies and the loan agreement.
• Down Payment: Borrowers are required to make a down payment towards the car’s purchase price. The down payment amount can vary based on the lender and the borrower’s creditworthiness.
• Documentation: Borrowers need to submit documents like identity proof, address proof, income proof, and other relevant documents to apply for a car loan.
• Collateral: The car itself serves as collateral for the loan. If the borrower defaults on repayments, the lender can repossess the car to recover the outstanding amount.
• Purpose: Car loans are specifically designed to facilitate the purchase of a car for personal transportation, making it more accessible for individuals who may not have the full funds upfront.