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.
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