Credit Glossary

DALLAS, TX.–December 17, 2005–It’s no secret that with some of the jargon dealerships use and with other legalese, it can be difficult to understand just what a person is getting into when he or she signs the paperwork for a loan. There are other times when it’s difficult to understand whether a loan is a good deal or not. Well, here at Nations Auto Lending, we want to take some of the guesswork out of buying or financing a used car, so we’ve put together a list of relatively common terms you’ll encounter when applying for a used car loan, or if you’re in the market to refinance your old one. If there’s a specific term or question that we haven’t answered, you may find it in our FAQ section as well. If your question still isn’t answered, please feel free to contact us.

APR
This stands for Annual Percentage Rate. It’s a percentage of the yearly credit, and is determined by the total amount that a person is financing (in this case, perhaps the amount you wish to finance a used car for), the term of your loan (how many monthly payments you want to make), as well as the total of the finance charges that you’ll accrue. 

Cosigner 
Having a cosigner may greatly enhance the chances of getting a used car loan, or being able to finance a new car. A cosigner is a person who also signs the loan, and he or she accepts the same responsibility for the loan as you do. In other words, if you default on the loan, or cannot pay it back, the lending institution may ask that the cosigner pay off the balance. 

Delinquency 
What this means is that you did not make the scheduled payments of your used car loan on time, or if you financed a new car, you were late on your monthly payment. When applying for a used car loan, it is important to receive a loan for the amount you can afford over time. Multiple late payments can mean that the lending institution can foreclose on your loan.

Gross Monthly Income 
This is the total amount of your income for each month and before any bills or expenses are subtracted.

Negative Equity
Negative Equity occurs when the total you owe on your past loan is higher than the actual value of the car. In other words, if you owe $3,000 on your car and the car is worth $1,900, you have a negative equity of $1,100. 

Refinancing 
Simply put, refinancing means that you will be paying off an old used car loan with the money from another used car loan. For more information, or to obtain a loan from us or one of our nationwide network of lenders, fill out our simple, 30-second loan application, and someone will contact you shortly.

Term 
This is the length of time from your loan date (which will be on your used car loan papers that the dealership or lending institution will give you) to the date when the entire balance is due. For people with bad credit that are trying to obtain a used car loan, having a longer term may be more beneficial, and give you more leeway with the amount due each month.

About Nations Auto Lending

Nations Auto Lending, the new and used auto loan experts, is an online car loan company with a nationwide network of lenders that specialize in obtaining auto loans for customers regardless of their past credit history. For more information or to apply for a loan, please contact Nations Auto Lending by visiting the company’s website at www.nationsautolending.com .