Car loans: what's different from a personal loan
The car serves as collateral. Two consequences: rates drop substantially (CAT lands around 14–17%, well below the 40% typical of a personal loan), and you're required to carry full-coverage insurance for the life of the loan.
The down payment matters more than it looks. A 30% down payment lowers the monthly, yes, but also the CAT the bank offers — they see less risk. If you can wait three months and put 30% down instead of 10%, it usually pays off.
- ✓New or used car (age limit varies by bank)
- ✓Typical down payment: 10–30%
- ✓Usual CAT: 14.5–16.5% (banks)
- ✓Terms: 24 to 84 months