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Glossary of Auto Loans Now.

This auto loan glossary will help you get a better understanding of terms which are used related to auto financing.

Acceleration 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".

Annual 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.

Appraiser - One who appraises the value of an automobile.

Arbitration Clause - 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.

Cosigner - 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.

Credit Worthiness and History - This is your past and future abilility to repay loans and other debts.

Creditor 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.

Default - In 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.

Document 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.

Down 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.

Gross Monthly Income - This is the amount of money which you earn before taxes and other deductions are taken out.

Interest or Interest Rate - The amount of money which is charged for borrowing money.

Kelly 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 - A 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.

Lien - 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.

Repossess - When 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.

Sales Agreement - 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 upon.

Term - 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.

 

Need a home loan but have bad credit? There are companies which have programs specifically designed to help people with credit problems. Bad Credit Home Loans is a nationwide service for bad credit home financing. Current home owners can also apply for a Second Mortgage Loan which will provide you with fast cash at competitive rates.

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