Loan Terminology


Auto Loan Terminology

Amount Financed:

The total amount of credit provided to you.

APR:

Annual Percentage Rate, or APR, is the cost of credit expressed as a percentage.

Down Payment:

The amount of cash or trade equity you apply to your purchase.

Equity:

The difference between your trade payoff balance and its actual cash value. (It may be positive or negative.)



Finance Charge:

The total amount you pay to use credit.

Retail Installment Contract:

The finance agreement betwen you and the lending institution, allowing for payment over time at a fixed monthly payment amount and rate.

Simple Interest:

The finance charge calculation based on the unpaid principal balance, number of days between payments and the APR.

Stipulation:

The additional documentation or action required to complete the transaction. (For example: a pay sub as proof of employment.)



Term:

The number of monthly payments provided for in the retail installment contract.

Total of payments:

The amount you will have paid after you have made all payments as scheduled in the retail installment contract.

Total Sales Price:

The total cost of your purchase on credit including finance charge, down payment and amount financed.