A car loan is a type of financing that helps you purchase a vehicle by borrowing money from a lender. You repay the loan in fixed monthly instalments over an agreed period, typically with interest. Most car loans are secured, meaning the car itself acts as collateral, allowing the lender to repossess it if you fail to make repayments

While some lenders offer 100% finance (no deposit required), some require a deposit of 10-20% of the car's price where the income is lower or higher first time lend A larger deposit can reduce:
The amount you need to borrow
Your monthly repayments
The total interest paid over the loan term

Secured Car Loan – The car serves as collateral, meaning lower interest rates but the risk of repossession if you don’t repay.
Unsecured Car Loan – No collateral required, but interest rates are higher since the lender takes on more risk.

Most traditional car loans are secured, while personal loans used to buy a car are unsecured.

Your interest rate depends on:
Credit score - Higher scores qualify for lower rates
Loan term - Shorter loans often have lower rates.
Deposit size - A larger deposit can lower your sometimes rate.
Car age - New cars usually get lower rates than older vehicles .
Employment & income stability - A steady job history improves your chances.

Yes, some lenders offer bad credit card loans, but they typically come with:
Higher interest rates.
Stricter lending conditions
Shorter loan terms

To improve approval chances:
Consider a larger deposit
Apply with specialized bad credit lenders

Most car loans have terms between 1 to 7 years, with 5 years being the most common.
Shorter terms (1-3 years) – Higher monthly payments but less interest paid.
Longer terms (5-7 years) – Lower monthly payments but more interest over time.

Yes, but check for early repayment fees. Some lenders charge a penalty for early payoff, while others allow extra payments without any fees. Paying off early can save you money on interest.

Most lenders require comprehensive car insurance to protect their assets (the car). If the vehicle is damaged or stolen before the loan is repaid, insurance ensures the lender doesn’t lose money.

For secured car loans – You must pay off the loan in full before transferring ownership to a buyer.
For unsecured car loans – Since the car isn’t collateral, you can sell it at any time but still need to continue making loan repayments

Tip - Contact your lender to get a payout figure before selling.

Yes! Car loan refinancing allows you to replace your current loan with a new one at a lower interest rate or better terms.

Refinancing may be a good option if:
Your credit score has improved since taking the original loan
You want lower monthly repayments
Interest rates have dropped
You want to change the loan term

Check for refinancing fees before making a decision.