A car loan is a loan that allows the customer to buy a four wheeler, and pay off the loan over a period of years instead of paying the full price out of his/her pocket at the time of purchase. The repayment period can range from 1-7 years, and some cars are even eligible for 100% financing (i.e. – the entire price of the car is offered as a loan amount by the bank).The terms of a car loan depend on various factors, including your income and credit history.