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Is a car loan the same as a promissory note?
I was chatting with my father about loans the other day, and he told me that car loans are a type of promissory note. I didn’t think that sounded right, but I wanted to make sure. Are car loans and promissory notes the same thing?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Great question! While
car loans
are a type of promissory note, not all promissory notes are car loans. So the short answer is: No, car loans and promissory notes are not the same.Car loans are a type of agreement where one party borrows money from another to purchase a car. The borrower will pay the lender back over a given timeframe and with an **agreed-upon amount of interest. If they don’t, the lender may repossess their car.
Alternatively, promissory notes include any written financial agreement that defines an amount of money to be loaned and a timeframe for it to be returned. That being said, promissory notes include nearly any type of loan—including car loans.
If you’re already taking the time to learn about car loans, take an extra minute to save on car insurance with
Jerry
. A licensed broker, the Jerry app can help you find and compare affordable quotes from over 50 top providers in minutes. If you find a better rate—Jerry can help you switch policies and even help cancel your old one!View full answer
- Gregory R.
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