The following terms are good to know about and understand when you think about refinancing your auto loan. These terms often come up in the refinance process.Companies use these terms to explain monthly payment calculations, define different groups in the financial contract, measure values connected to the loan like your credit score, and other matching things.
So our team at RateWorks has pulled together a list of terms we feel are the most important to understand.
APR is the rate of how much it costs to borrow money over a year plus other fees like loan origination fees. Generally speaking, this means that your APR will be higher than your interest rate inmost cases where origination fees are present.
The auto loan lender is the institution that loans you the money to buy your car. They can be a third-party bank, credit union, finance company, or other Federal Deposit Insurance Corporation (FDIC) member. Also, some car dealerships offer in-house lending. In contrast, other dealerships will resell your loan contract to a third-party lending institution.
The car loan amount is the money you borrowed to buy your car, which you pay back over the loan length.
The car loan interest rate is the interest the lender charges you for using their money to buy or refinance your car. It is a percentage of the principal amount you borrowed.
Get your free no obligation quote today and see how refinancing your car can save you. Join RateWorks today
The car loan payment is the amount you pay every month. Your payment goes toward paying off the auto loan amount as well as the interest on the loan. Payments are made for each month of the loan's term and pay down the principal value of the loan.
The car loan term is the loan length and is measured over several months. Typical loan terms are 36, 48, 60, and 72 months. You need to complete a payment on your auto loan for every month in the term's length.
Refinancing your car loan substitutes your old auto loan with a new loan. You can refinance to find a more favorable term and/or rate. Refinancing completes when a new lender pays off your loan from the old lender, takes over the debt, and accepts your monthly car payments.
There financed amount is almost always lower than your original car loan. One of the best ways to check refinance savings is by applying with RateWorks.
A credit score is a number that measures the likelihood of you paying off your financial obligations. It is measured by a combination of factors including your available credit limits, the number of bank accounts you have, outstanding debts owed, payment history, length of history, and other credit-related things.
In the auto finance process, this is an important number since lenders usually require a specific credit score.
A co-borrower is someone who enters into the loan contract with you—usually a family member, spouse, or partner. Your co-borrower shares the same responsibility with you for paying back the loan and can help you qualify for a better interest rate.
RateWorks is a direct lender, we are with you throughout your journey ahead. We create our own rates, process our own applications, service our own loans, and conduct our own payment processing.
Refinancing your home — or vehicle — is a personal decision based on several factors. And like many things in life, timing is everything.
The average gas price in the US is now at the highest level in history. Prices are higher than the previous record of $4.10 per gallon.
Most people need to take out a loan to make big purchases, like a vehicle. But if you’re new to car loans you may think about asking someone else to help.
Lower your auto loan payments, and lower your rate in a matter of minutes when you refinance your auto loan with us today! It's just that simple.
Free quote
Copyright © 2022 RateWorks. All rights reserved.
By accessing this website, you agree to be bound by its Terms and Conditions of use and compliant with all applicable laws and regulations. If you do not agree with these terms, you are prohibited from using or accessing this site. The materials contained within this website are protected by applicable copyright and trademark laws.