Purchasing a vehicle is an exciting experience, but the finance process can feel complex for many. If you're feeling intimidated by the finance process, don't be. We're going to share a few common auto finance terminologies to give you the confidence as you pursue your auto loan.
5 Common Auto Finance Terms
- Amortization: An amortization is the repayment of a loan by installments. It consists of regular payments that includes the interest and principal balance.
- Amount Financed: This is the credit the lender is willing to provide you as the borrower.
- APR: Also known as annual percentage rate, this is a yearly rate of interest that includes all fees and expenses paid to acquire the loan.
- Certificate of Title: A document issued by your state to provide evidence of motor vehicle ownership.
- Credit History: A record of a person's paid and unpaid debts. This enables lenders to see whether an applicant has a good history of repaying debts.
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