A car loan is a financial product designed to help individuals purchase a vehicle without paying the full amount upfront. These loans can be secured, where the vehicle serves as collateral, or unsecured based on the borrower's creditworthiness.

Interest rates vary depending on factors such as credit score, loan term, and the lender's policies, offering options for fixed or variable rates.

Loan terms typically range from 3 to 7 years, impacting monthly payments and total interest costs. A down payment is often required upfront, reducing the loan amount and monthly installments.

Lenders evaluate credit history and score to determine eligibility and interest rates, providing pre-approval to streamline the purchasing process. Be mindful of additional fees like origination fees and penalties for late payments.

Comprehensive insurance coverage for the vehicle is typically required. Timely payments can improve credit scores, while missed payments can negatively affect them. Refinancing options may be available to secure better terms after purchasing the vehicle.

It's essential to carefully assess your financial situation and budget before applying for a car loan to ensure it fits your long-term financial goals.