Definition
A loan used to buy a car. You repay it in monthly installments, including interest, until the loan is fully paid off.
What to consider
- Compare offers to find the best rate for your car loan.
- Make sure the monthly payment fits comfortably within your budget.
- Consider the total cost of the loan over time, not just the monthly bill.
Real world scenarios
- Tyler finances his first car with a reasonable interest rate after shopping around multiple lenders.
- Sarah refinances her auto loan when market rates drop, reducing her monthly payment and total interest costs.
- Jasmine sees her credit score improve as she consistently pays her auto loan on time each month.
Related terms
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