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Auto Loan Glossary

Do you want to get the best interest rate and terms on your new auto loan? In order to get the best loan possible, you need to be knowledgeable about the process! Check out our helpful Utah Car Loan glossary to learn the definitions to all of the important terms you should know about!

  • Amortization - The calculation of the monthly payments necessary to pay off an auto loan by its maturity date.
  • Co-Signer - Separate party that agrees to repay the balance of an auto loan if the buyer is unwilling or unable to repay. Having a co-signer can sometimes allow you to get better loan terms.
  • Credit Score - A numerical value that helps determine your credit-worthiness. Your credit score is an important factor the loan approval process.
  • Delinquent - A borrower's failure to make loan payments on time. This can result in extra fees from the lender.
  • Down Payment - The amount of money paid up front for your vehicle and not included in an auto loan. Generally, larger down payments can help secure better auto loan terms.
  • Interest Rate - The lenders charge for their loans. Auto loan interest rates are usually presented in an annual percentage rate.
  • List Price - This is the recommended price for a vehicle according to the manufacturer. Sometimes referred to as Manufacturer's Suggested Retail Price or MSRP.
  • Maturity Date - The day in which an auto loan's balance is due. If your auto loan is not paid off by this date, your vehicle may be repossessed by the lender.
  • Origination Fees - Fees associated with the lender's processing of an auto loan.
  • Prepayment Penalty - A fee for paying off your auto loan before the term ends. It's meant to protect the bank from lost interest income.
  • Principal - The amount of money remaining to be repaid on an auto loan, not including interest.
  • Refinancing - The process of replacing your current auto loan with a new one, usually to attain better terms. Our Utah car loans can be used for refinancing!
  • Term - The length of a loan, most auto loans last from 36-72 months. Typically, a borrower is better off with shorter term length.
  • Title - A legal document that provides proof of ownership of a vehicle.
  • Underwriting - The process a lender goes through in determining whether to approve or decline an auto loan application.
  • Upside Down - Being "upside down" on your auto loan means you owe more money on the loan than what your vehicle is currently worth. This typically occurs when people taking out car loans with long lengths or high interest rates.
  • Usury Limit - Refers to the highest interest rate allowed according to state laws.