Quick Answer: Is Car Finance A Loan?

Quick Answer: Is Car Finance A Loan?

Direct Lending

You might borrow money directly from a bank, finance company, or credit union.

In your loan, you agree to pay the amount financed, plus a finance charge, over a period of time.

Once you’re ready to buy a car from a dealer, you use this loan to pay for the car.

Is it better to get finance or a loan for a car?

In many cases, the interest rate you can get on an auto loan will be lower than what you can get on a personal loan. That’s because the auto loan is a secured loan (the vehicle is collateral) whereas the personal loan is unsecured. However, dealership financing can be the best deal in some specific situations.

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