Glossary

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.