What is a Car Loan and How Does It Work?

What is a Car Loan and How Does It Work?
Buying a car is a major financial step, and for most people, paying the full cost upfront is not always possible. That is where a car loan comes in. A car loan helps you finance your vehicle purchase by borrowing money from a bank or financial institution and repaying it over time in monthly instalments.

SwipeLoan offers easy and fast car loan solutions to help you own the vehicle you want without financial stress.

What is a Car Loan?
A car loan is a type of secured loan where the vehicle you purchase acts as collateral. This means the lender can take back the car if you fail to repay the loan. The loan amount, interest rate, and repayment period are decided based on your credit score, income, and other eligibility factors.

With SwipeLoan, you can compare car loan offers from top banks and NBFCs and choose the one that best suits your needs.

How Does a Car Loan Work?
Loan Application: You apply for a loan by providing basic personal, financial, and vehicle-related details. This can be done entirely online through SwipeLoan.

Loan Approval: Once the lender verifies your information and documents, the loan is approved. Some customers may get pre-approved offers based on their credit profile.

Disbursal: The loan amount is usually transferred directly to the car dealer or seller. You take delivery of the car, while your repayment schedule begins.

Repayment: You repay the loan in fixed monthly instalments or EMIs over the agreed period, which could range from one year to seven years.

Key Features of a Car Loan
Loan Amount: Up to one hundred percent of the on-road price of the car

Interest Rates: Fixed or floating rates, depending on the lender

Tenure: Flexible repayment period from one to seven years

Processing: Minimal paperwork and quick disbursal with SwipeLoan

Prepayment Option: Some lenders allow early loan closure with low or no charges