Again, this is a very common type of loan that most people have at least heard of. Unlike a personal loan, the cash you’re borrowing is earmarked for a specific purchase, so you’ll find yourself dealing with some extra rules and considerations. For one thing, your vehicle loan will almost certainly be secured against the vehicle you’re buying. That means if you don’t keep up your end of the deal, you’ll stand to lose the car itself. You might not have to borrow the full amount the vehicle costs, of course. If you’ve already made any down payments against the value, those will bring down the loan amount you need.
As with other types of loan, you’ll probably be making repayments for years to come. In fact, as car prices continue to grow, vehicle loan terms are extending along with them.
Read our guide: Car tax refunds