Meaning & use
auto loan
Last updated
Meaning
nouncountable
Money borrowed from a bank or lender to buy a vehicle, repaid in installments over time, with the vehicle often serving as security.
Grammar: Counts as a normal noun: an auto loan, two auto loans.
Patterns
- take out an auto loan
- an auto loan from someone
They took out an auto loan to buy a used truck.
Her monthly auto loan payment is three hundred dollars.
Interest rates on auto loans rose again this year.
Word forms
| plural | auto loans |
|---|
Common combinations
- take out an auto loan
- He took out an auto loan for the new car.
- pay off an auto loan
- She finally paid off her auto loan.
- apply for an auto loan
- You can apply for an auto loan online.
- auto loan rate
- The auto loan rate depends on your credit score.
- auto loan payment
- Their auto loan payment is due on the first of the month.
Synonyms and how they differ
- car loan
- Car loan is the most common alternative and sounds slightly more everyday, whereas auto loan is typical in American finance.
- vehicle loan
- Vehicle loan is broader and also covers motorcycles or vans, so it sounds more formal.
- car finance
- Car finance is the usual British phrase and often includes leasing deals, which auto loan does not.
Word family
Commonly confused: auto loan or car lease?
auto loan vs car lease
A lease lets you use a car for a fixed period without owning it, while an auto loan lets you buy and eventually own it.
Practice
Because he could not pay the full price, he took out an ____ to buy the car.
Choose one answer.
An auto loan is borrowed money for a vehicle. Tax, repair and insurance do not pay for the purchase.
Make it your own
Write a sentence using “auto loan”, then check it and compare it with the examples above.