car loan

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car loan

A family signs the paperwork for their new car loan at the dealership.

Definition

Noun: A sum of money lent to an individual specifically for the purpose of buying a vehicle, typically an automobile. This is a type of personal loan where the vehicle itself often serves as collateral for the debt.

Usage

A "car loan" is a financial product offered by banks, credit unions, or other lenders. The borrower receives funds to buy a car and agrees to repay the amount, plus interest, over a set period. The term is used to specify the loan's purpose.

Examples
  • Noun:
    • I applied for a car loan at my local bank to finance the new sedan.
    • The dealership offered a low-interest car loan to qualified buyers.
    • Her monthly budget includes a payment for her car loan.
Advanced Usage
  • "to secure a car loan": to successfully obtain financing for a vehicle purchase.
    • With a good credit score, it was easy to secure a car loan.
  • "to pay off a car loan": to complete the repayment of the borrowed amount.
    • She made extra payments to pay off her car loan early.
Variants and Related Words
  • Auto loan (n): A direct synonym for "car loan."
  • Vehicle financing (n): A broader term that encompasses loans, leases, and other methods of funding a vehicle purchase.
  • Secured loan (n): A loan backed by collateral (like a car), which is the category a typical car loan falls into.
Synonyms
  • Auto loan: A loan for purchasing an automobile.
  • Automobile financing: The process or means of providing funds for a car purchase.
Related Phrases
  • Loan term: The length of time over which the car loan must be repaid.
    • He chose a five-year loan term for his car loan.
  • Down payment: An initial upfront payment made when taking out a car loan.
    • A larger down payment can reduce the size of your car loan.
car loan

A family signs the paperwork for their new car loan at the dealership.

Noun
  1. a personal loan to purchase an automobile