An Auto Loan is a loan availed to purchase a motor vehicle such as a car, truck, and motorcycle.
Auto Loans are secured loans. This means In order to avail an auto loan you need a collateral. In case of an auto loan, the collateral will be the vehicle that is being purchased.
Until the borrower pays off the auto loan completely, technically the lender owns the car. An Auto loan typically has a lower interest rate in comparison to an unsecured loan.
The borrower can pay back an Auto loan in Equal Monthly Instalments (EMIs). These monthly installments cover a proportion of both the principal and the interest.
The lenders check whether or not you are eligible for an auto loan based on your annual income, age, the capability to pay back the loan, place of residence and occupation.
Whether you want to purchase a vehicle for your personal use or your business purpose, an auto loan is always a safe and feasible option that you should consider.