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Are you confused with the several terminologies
involved in auto loans? Is the lack of adequate knowledge
about auto loan terminologies hampering your decision making
abilities? If yes, then Consumer Auto Lending's glossary will
be immensely helpful.
Annual Percentage Rate
Earlier it was solely the rate of interest that was used for
comparison. So low interest auto loans failed to satisfy the
borrowers because lenders would increase other charges. Therefore,
now APR is used. APR takes into account both the rate of interest
and other combined charges.
Balloon Payment
If a borrower wants to discontinue with monthly repayments
and pay the remaining balance of auto loans at once, then
he can save tremendously in terms of interest cost. Paying
of auto loans at once is known as balloon payment.
Base Price
Base price constitutes the cost of the car along with only
the basic options.
Blue Book
Blue book value is a method of deriving wholesale and retail
value of each vehicle. One can compute the value of used vehicles
with the help of this method.
Cosigner
Cosigner assumes responsibility for the payment of auto loan
if the borrower fails to repay it.
Down Payment
An upfront payment made by the borrower at the time of drawing
auto loan is known as down payment. The amount of down payment
is dependant on borrower's credit history, amount of loan
being taken and the period within which loan will be repaid.
Manufacturer's Suggested Retail Price
Manufacturer recommends a price at which the dealer must try
to sell. It is also known as list price or sticker price.
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