Glossary of Auto Loans Now.
auto loan glossary will help you get a better understanding
of terms which are used related to auto financing.
Clause - This
clause allows the credit grantor also known as the lender to
speed up the date when you loan is due or paid off. If you default
on the loan the lender has the right to demand payment in full
under the "Acceleration Clause".
Percentage Rate aka APR - This
is the amount which is charged by the lender for loaning money
to you. The APR is calculated as an annual equation which is
based on the total amount financed, finance charges and the
term of the loan.
- One who appraises the
value of an automobile.
Arbitration is the word used when a buyer and seller cannot
come to an agreement on a said problem after the point of sale.
If an arbitration agreement was in acted during the original
signing of the sales agreement, an arbitrator which is a neutral
party will be used to hear both sides of the conflict an reach
a decision. The arbitrators decision stands and constitutes
a binding settlement.
- A cosigner is
a person who has already established a credit history and is
willing to cosign on a loan with a person who is having trouble
obtaining financing due to lack of credit, bad credit or perhaps
to little income.
Worthiness and History - This
is your past and future abilility to repay loans and other debts.
or Credit Grantor - The
credit grantor or creditor is the actual lender of money whether
it is a person, persons or company which is extending the requested
credit to you.
layman terms - not holding up your end of the deal which was
made between yourself and a lender. In the event a customer
defaults on the original agreement with the lender, the lender
has the right to repossess the automobile.
Fee - Most
dealerships charge which is called a document fee or processing
fee. This fee charged for processing your paperwork and helping
you to obtain financing. Document fees vary greatly and can
be negotiated in most cases.
Payment - This
is the amount of money in which a lender requires you to put
up front as a measure of good faith. The better a persons credit
worthiness is usually results in less money required as a down
payement from the lender.
Monthly Income - This
is the amount of money which you earn before taxes and other
deductions are taken out.
or Interest Rate - The
amount of money which is charged for borrowing money.
Blue Book - This
book contains the appraised value of all makes, models and years
of vehicles. Appraisers will use this book to help determine
the value of an automobile.
lease is in most cases for a period of 3 years. A lease differs
from a purchase because at the end of the said lease period
the automobile is turned back in to the dealer. Many people
choose the lease option for various reasons such as tax benefits,
lower down payment, lower monthly payments or other reasons.
With most leases you have the option to purchase the vehicle
at the end of the lease by paying a balloon payment. Most leases
limit the amount of mileage you can drive per year, if you exceed
the mileage limit you are usually charged a pre determined amount
per mile over the initial lease contract.
- A lien is a claim against
a property which is being financed. The lien holder is usually
the lender who put up money for the buyer to purchase an automobile
and the lien holder has rights to the property until the loan
has been repayed.
a lien hold takes possession of a property which has been financed.
Automobiles are usually repossessed because the customer has
went into default of the contract.
There are many different names for the sales agreement such
as; purchase order, purchase agreement or agreement of sale.
This contract is an in depth layout in writing which specifies
the specific terms in which a buyer and a seller has agreed
- The period of time between
the beginning of a loan and the end. Most automobiles are financed
in 36, 48, 60 and 72 month terms.
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