Posted on December 28, 2019 by NALN
It is not uncommon for people to feel excited when shopping for a new car. At the same time, shopping for an auto loan or an auto loan refinance can be utterly confusing. An in-depth understanding of some of the typical auto loan terminologies can relieve your stress and simplify the process for you.
Let’s take a look at some of the most common auto loan terminologies and their meanings.
Let’s break it down.
There are times when a borrower either fails to make timely payments or goes against the loan agreement. In either of the two scenarios, the borrower is said to have defaulted.
This document is issued by the department of motor vehicles (DMV) and is also known as the pink slip. It contains details about the ownership of a particular vehicle.
Maturity refers to the date on which the loan needs to be paid back completely. It is also known as the loan’s length. In most cases, the term of a car loan is five years (60 months).
In a majority of cases, the lender is a bank lending you the money. However, sometimes, a lender is an individual dealer who will offer car financing. Regardless of whether you borrow from a bank or an individual, the lender is the one who lends you the money and the one to whom you owe.
An interest rate that tends to fluctuate following the index or prime rate is known as the variable interest rate. You can bag a good deal on the variable interest rate. However, if the loan term is long and the prime price is high, things might get a little tricky. Furthermore, if the loan term is unnecessarily long, you will have to pay more interest, and you will eventually end up paying a lot more than necessary.
The annual percentage rate or APR isn’t quite the same as an interest rate. It is the amount; the consumer is supposed to pay every year. The annual percentage rate makes it easier for you to compare various car loans and zero-in on the best one.
The terms mentioned above will help you understand the process of car financing a lot better. They will enable you to compare multiple loan offerings with one another and settle for the one that suits your needs, as well as your financial capability.
National Auto Loan Network is headquartered in Newport Beach, California. The company was founded in 2010, by a group of finance professionals with over 40 years of combined industry experience. Under the direction of president and CEO, Marco J. Rasic, NALN specializes solely on the refinancing of motor vehicle loans. National Auto Loan Network''s skilled team of loan officers help hundreds of consumers replace their high-interest auto loans more favorable ones. For more information about National Auto Loan Network please visit naln.com
