Auto Loan Glossary

Here are some helpful terms that will get you on your way to Auto Loan success!

Additional Features:

These are accessories or extras that are added to a car. These items could be a stereo, power windows, sunroof, or a car alarm.

Amortization:

This is repaying a loan or debt off in payments that are regulated. Payments are split up into principal amount and an interest fee.

Asset:

A valuable item, such as property or a possession, that is used in securing a debt.

Credit Profile:

A history of what money was borrowed and how it was paid back.

Depreciation:

A loss in value of an item or property because of wear and tear over time.

Equated Monthly Installments (EMI):

A monthly payment that is fixed.

Lease:

The borrower is allowed to use the item or property for a limited amount of time for a monthly fee, but they do not own the item or property.

Lending Rate:

Interest that is charged by the lender for the amount to be financed.

Loan Tenure:

The length of time the loan is for.

Margin Money:

When lenders do not fund the loan in full, the borrower is to pay a percent of the loan as margin.

Principal:

The amount of the loan before interest. The amount of the loan is called the capital sum.

Registered Owner:

The name of the person who registered the vehicle.

Sales Certificate:

A certificate stating the sale of the car by the dealer. The certificate is required when the car is registered.

Transfer of Car:

For a used car to be sold, the ownership of the car needs to be transferred to the buyer.

Warranty:

The agreement that the property or items are as they should be or the seller is to repair the problem. A warranty is usually within a given time for the problem to be identified.