Car Loans: Terms to Know
Car Loans: Terms to Know
Car Loans: Terms to KnowWhether purchasing your first car or tenth, if your not familiar with loan terms, it's a good idea to get up to speed on the language. Nobody wants to look the fool. While the list is expansive, it's always good to know a few terms.
Helpful Terms
Delinquency: The failure to make payments on time.
Default: Failure to repay a loan.
Depreciation: The decline in the value of an auto due to general wear and tear.
Finance Charge: The total amount that the credit will cost.
Grace Period: The period of time after the due date that's granted before a penalty kicks in. Some borrowers claim it's about twenty minutes.
List Price: The manufacturer's suggested retail pricethe sticker price.
Lien: A claim upon a piece of property in regards to the holder's debt.
Title: A legal document that proves ownership of property.
Upside down: This when you owe more than the car is actually worth, quite common nowadays.
Usury. Usury is excessive interest and actually considered a sin in the Bible. Usury is what most people experience when they take out a loan. The only way to avoid usury is to pay in cash or keep your credit pristine.
It Gets Worse
Snake Oil: These are the features or services that the dealership can add onto the car in order jack up the price and increase your monthly payments. Things like rust-proofing, extended warranty, upholstery service. These services and products are marked-up considerably.
Repossess: Plain and simple. This is when they come and take the car back from you.
Usually at night when your sleeping.
You've probably noticed that there aren't many positive words when it comes to loans. There's probably only three good words, "Paid In Full".