SIMPLE TERMS TO KNOW IN GETTING A CAR LOAN

Different terms define different things in different spheres it is the same when you are planning to get a car loan in other to purchase your car. The idea of getting a car loan to purchase a car has been come prevalent over the years as people as seen it as a way out of the unnecessary burden of having to wait until they can gather the full money and make payment for their car. The idea of getting a car loan either for getting a new car or for refinancing is that the total cost can be spread through many months which will ensure the ease of payment while the buyer is still able to focus their money on some other things and as well own a car to their name. All these are possible with access to a car loan in Partner Colorado Credit Union.

However, there are a few terms that whoever will be venturing into getting a car loan should get themselves accustomed to, terms such as interest rate, credit score, and others. This article will be giving us a brief definition of each of the term

Credit Score: This is referred to as a number that is arrived at based on the analysis that is carried out on a person’s credit files. and it helps to know the creditworthiness of such individuals. This is most of the time what determines your access to a car loan.
Interest Rate: This is the annual fee the lender gets from borrowing the money needed to get a vehicle.
Annual Percentage Rate (APR): This refers to the total borrowing cost of the car loan which includes the interest rate and other additional fees.
Down Payment: This is the money paid before taking out the car loan from your lender. It is usually a good thing to have at least about 20% of the total amount as a down payment because the higher the down payment the lower your monthly payment.
Loan Term: This refers to the period of repaying the car loan.
Principal: This has to do with the amount you are paying minus the interest and other additional fees to be paid. This is the down payment in addition to the cost of the car.
Total Cost of the Loan: This is the total amount of money paid for the care loan which includes, the principal fee, interest, and additional fees.