A car loan is money borrowed from a financial institution (like a bank or Non-Banking Financial Company – NBFC) to purchase a vehicle. The car itself usually serves as collateral for the loan.
- EMI (Equated Monthly Installment): This is the fixed amount you pay back to the lender each month. It includes a portion of the principal loan amount and the interest.
- Loan Term (Tenure): The duration over which you repay the loan, typically ranging from 1 to 7 years (up to 8 years with some lenders).
- Loan Amount: Lenders typically finance 80% to 100% of the on-road price of a new car, depending on your eligibility and the specific scheme.
