Simply, a car loan is an agreement between the lender and you, the borrower, allowing you to borrow money for an agreed-upon term to purchase a vehicle. While getting a car loan can be more complex than getting a personal loan, it is still possible to do it yourself and land a good deal.

Types of car loans: Banks offer 3 types of car loans - new car loan, used car loan, and loan against car. As the names suggest, new car loans can be used to purchase a new car whereas a used car loan can be used to purchase a used or pre-owned car.