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Something extra you can purchase to enhance your vehicle.
Annual Percentage Rate (APR)
The APR includes both your interest and any additional costs or prepaid finance charges you might pay. It represents the total cost of credit on a yearly basis after all charges are taken into consideration.
Auto loan
Money borrowed from a financial institution to help you pay for your purchase of an automobile.
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Credit history
A record of a borrower's past financial behavior, including loans and other credit.
Credit report
A detailed summary of your borrowing history.
Credit reporting bureau
One of the three major reporting bureaus (Equifax®, TransUnion®, Experian®) which tracks a borrower's credit history.
Credit score(s)
A statistical method that lenders use to quickly and objectively assess the credit risk of a loan applicant.
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A failure by the borrower to make a payment by the specified due date.
The rate at which your car loses its value over time.
Down payment
The down payment is the amount of your auto's purchase price you supply up front in cash to get your loan.
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Fair Isaac Corporation® (FICO®)
The company that invented the formula for computing credit scores.
Federal Trade Commission (FTC)
Independent agency of the U.S. government, established in 1915, charged with keeping American business competition fair and working in the consumer's best interest.
A general term that refers to a method by which you borrow money in order to pay for something, such as a car.
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Hard inquiry
A request by a creditor to see your report which gets triggered by a credit application and gets noted in the inquiries section of the report.
Home equity loan (HEL)
A fixed rate loan, or installment loan, in which your home serves as collateral.
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Interest rate
The cost the lender charges the borrower for using their money; expressed as a percentage.
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A contract between a lessor and a lessee for the use of an auto or other property, subject to stated terms and limitations, for a specified period and at a specified payment. With a lease, you do not own the vehicle.
Lease buyout
The optional purchase of the vehicle when your lease term has ended.
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Mileage limit
The maximum amount of miles that you are allocated under a lease before incurring penalties.
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National Automobile Dealers Association of America (NADA)
Founded in 1917, it represents new car and truck dealers, both domestic and international.
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Opportunity cost
The money that would accumulate due to interest if you were to leave it in your savings account.
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When you are told by a financial institution how much of a loan you will probably be able to receive based on their cursory look at your financial information.
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To replace a loan with a more favorable one.
Relationship Banking
A product offered by banks in which you get special discounts and incentives if you have several accounts with the same bank. Generally, the checking account product serves as the anchor account.
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Savings account
A deposit account at a financial institution which generally pays interest, but cannot be withdrawn by check writing.
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The period of time that you have to pay off a loan.
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U.S. Federal Trade Commission (FTC)
See Federal Trade Commission.
Utilization ratio
The ratio of used credit and available credit.
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