A vehicle loan, also known as an auto loan or car loan, is a type of loan designed specifically for the purpose of purchasing a vehicle. It provides individuals with the necessary funds to buy a car, motorcycle, or any other type of vehicle.
The key feature of a vehicle loan is that the vehicle itself serves as collateral for the loan. This means that if the borrower fails to repay the loan as agreed, the lender has the right to repossess the vehicle to recover their funds.
Vehicle loans are typically offered by banks, credit unions, and other financial institutions.
This type of loan is specifically designed for purchasing a brand-new car from an authorized dealer. The loan amount is based on the ex-showroom price of the vehicle, and the repayment period can range from 1 to 7 years.
Two-wheeler loans are designed for purchasing motorcycles, scooters, or other two-wheeler vehicles. The loan amount depends on the on-road price of the vehicle, and the repayment tenure can range from 1 to 5 years.
Commercial vehicle loans are tailored for businesses or individuals looking to purchase commercial vehicles like trucks, buses, or vans. These loans help in expanding or establishing a commercial fleet. The loan amount and tenure depend on the type and purpose of the vehicle.
This type of loan allows borrowers to pledge their existing vehicle as collateral and obtain a loan. It is a secured loan option where the loan amount is determined based on the market value of the vehicle. The repayment tenure can vary depending on the lender's policies.
With the growing popularity of electric vehicles (EVs), some lenders offer specialized loans for purchasing electric cars or two-wheelers. These loans often come with specific benefits and features, such as lower interest rates or longer repayment tenures.
