Auto Loan Terms and Jargon:
Negotiated Price of the Vehicle: The purchase price of the vehicle agreed upon by both the buyer and the dealer.
Down Payment: The initial amount paid to reduce the auto financing amount.
Extended Service Contract: Optional mechanical and electrical protection to supplement the warranty coverage.
Credit Insurance: Optional insurance that pays the scheduled unpaid balance if you die or scheduled monthly payments if you become disabled. In most cases, you can obtain a cheaper rate by dealing directly with an insurance agent and thus avoiding added commission fees.
Guaranteed Auto Protection (GAP): Optional protection that pays the difference between the amount you owe on your vehicle and the amount you receive from your insurance company if the vehicle is stolen or destroyed during the time you are making auto financing payments.
Amount Financed: The dollar amount of the loan.
Annual Percentage Rate (APR): The cost of credit for one year expressed as a percentage.
Finance Charge: The fee you pay to use credit.
Fixed Rate Financing: The finance rate remains the same over the life of the contract.
Variable Rate Financing: The finance rate varies and the amount you pay may change over the life of the contract.
Monthly Payment Amount: The dollar amount due each month to repay the credit agreement.
Assignee: The bank, finance company or credit union that awarded the auto financing loan.
Calculate your good or bad credit auto loan payment.
Bad Credit People should Apply for Easier Approval Auto Loans - When credit is bad, it may be more important to give more thought to getting a loan rather than having the perfect auto. If you know you have bad credit, it may not do you any good to be particular about what kind of car you desire. You may have a very hard time just finding a lender to provide financing for you and you may also need to give a larger down payment. If you want good interest rates on a loan, work on getting credit scores better, then shop around for the best interest rate on an auto loan.
It takes time to rebuild scores and if you can't wait, you may want to try to find the best rate for your less than perfect credit. Leasing or buying an auto may require scores around 650 or higher and a big down payment. Some dealerships can deal with high risk borrowers and provide financing at higher interest rates. This is one option to get an auto, and then you can begin to try to rebuild credit history even if it is with a high interest rate loan.
Unfortunately, when bad credit it is a problem, many consumers must often make do for the auto they can actually get approved for until they have good credit. Make repairing bad credit a prime goal so later there may be a chance to get the auto you really want to drive. Used auto lots may say they have their own financing and can give auto loans, but review the details for getting a loan. If the interest rates are more than 20%, and if you want to upgrade your auto later, this may not be the best choice. Once you have your auto loan, pay on time, every month to help rebuild bad credit scores and build a better credit history.
