Document background
The Car Loan Promissory Note is a crucial document in Indian vehicle financing transactions, combining the characteristics of a negotiable instrument under the Negotiable Instruments Act with security creation features. This document is typically used when a financial institution provides funding for vehicle purchase and requires both a promise to pay and security interest in the vehicle. It includes comprehensive details about the loan amount, interest rate, repayment schedule, and the specific vehicle being financed. The document must comply with Indian banking regulations, vehicle financing norms, and stamp duty requirements. It serves multiple purposes: evidencing the debt, creating security interest through hypothecation, and establishing the terms and conditions of the loan relationship between the lender and borrower.
