Car Loan Glossary For Consumers
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Understanding car loan financial terms can be confusing.
Use this glossary of common car loan terms.
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Acceleration Clause :
If you default on a loan this clause allows the lender to speed
up the rate in which the loan is paid off. This can include an entire
balance to be paid off immediately.
Agreement of Sale :
Otherwise known as a sales or purchase agreement, this agreement
basically states that the seller is selling and the buyer is buying
under a specified set of terms. Both parties would then sign the
contract.
Amortization :
Calculates the loan payment including interest on the outstanding
balance to be paid off at the end of a fixed period.
Annual Percentage Rate (APR) :
Often confused with interest rate, an APR supplies the cost of credit
over the course of a year. It is supplied as a percentage taking into
consideration the amount finance, any charges, and the term of the
loan.
Appraisal :
An estimate of the value of property, made by a professional appraiser.
Appraisal Fee :
A service fee for estimating the value of property.
Asset :
Property that can be used to repay debt, such as stocks, bonds, cars
or a house.
Automated Teller Machines (ATMs) :
Essentially computer terminals in which customers can withdrawal,
deposit, or received balance statements of their bank accounts or
credit cards.
Billing Error :
Any mistake in your monthly statement as defined by the Fair
Credit Billing Act.
Broker :
A person who assists a client in negotiating contracts or assisting
in the arrangement of funding, but does not loan the money themselves.
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