Vehicle loans are short-term finance and a common type of personal loan. Personal loans as a category cover a broad range of loans based on the objective of the funds and a vehicle loan is a similar kind but for the purchase of a vehicle. The vehicle can be a car, UTE, 4WD, Motorbike or other road vehicles. The vehicle loans are generally up to 5yr term and there are very few lenders who promote loans above 5yrs term.
How Are Rates Determined
Till the recent past, the interest rates on a vehicle loan were based on a declared loan percent by the respective lender.The rate in the early days was determined based on New/used vehicle, type of vehicle etc.Recently there has been a change in the industry where the Interest rates are determined based on the credit score. Higher the Credit score; lesser the interest rate and vice versa.