A car loan is a type of financing that allows individuals to borrow money to purchase a vehicle. The borrower agrees to repay the loan amount, plus interest, over a specified period, usually through monthly payments. This makes it easier for people to afford a car without paying the full price upfront. Typically, lenders evaluate the borrower's credit history and financial situation before approving a car loan. The loan amount, interest rate, and repayment terms can vary based on factors like credit score and the price of the vehicle.