Vehicle Loan

A vehicle loan (also called an auto loan or car loan) is a type of loan that helps you buy a vehicle — such as a car, bike, scooter, or commercial vehicle — by borrowing money from a bank or financial institution.

Here's a simple breakdown

Definition

A vehicle loan is money borrowed from a lender to purchase a vehicle, which you then repay over time through monthly installments (EMIs). The vehicle itself serves as collateral, meaning the lender can take it back if you fail to repay.

How it Works

• Apply for a loan - You approach a bank or NBFC (Non-Banking Financial Company).
• Loan approval - The lender checks your income, credit score, and repayment ability.
• Down payment - You usually pay a small part of the vehicle's price upfront (5-20%).
• Loan disbursement - The bank pays the rest directly to the vehicle dealer.
• Repayment - You repay monthly EMIs over a fixed tenure (usually 1-7 years).