Is a car loan the same as a mortgage?

I've read that car loans are a lot like a mortgage. Are they the same except for the collateral? What are some differences and similarities?

Car loans are similar to mortgages in a few ways, but the collateral is different (car vs. home). The main similarities between the two are that both are:
  • Installment loans
  • Types of secured loan
  • Have a fixed payment period
  • Have both prequalification and pre-approval options to help with budgeting
  • Both are simple interest loans
Conversely, mortgages are far more difficult to get compared to auto loans, require more time, and also require more paperwork. This makes sense, as a home is a far more expensive asset and represents more risk to a lender than a car loan. In either case, shopping around for the best rate is essential to saving money and finding the best deal.
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Eric Schad
Answered on Nov 24, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.

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