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Common Vehicle Finance Terms | Ponca City, OK

Vehicle Finance & Auto Loans In Ponca City

We’ll Help You Understand Vehicle Financing

Looking to buy a new or used car but overwhelmed by the jargon? Don’t worry—this glossary of common finance terms will help you get the foundation you need to understand the auto financing process. If you’re still not sure, consider talking to the Finance department at Jack Bowker Ford Lincoln in Ponca City, OK.

Lender

The lender is the establishment you get your auto loan from. This could be from a bank, a credit union, or through the car dealership itself.

Principal

The principal is the amount of money loaned from the lender.

APR

APR—or annual percentage rate—is the amount of interest you pay on your loan each year, and is calculated from the loan agreement.

 Amortization

 This term refers to having a fixed schedule for payments on an auto loan over a fixed period of time. With this process, you pay more on interest at the beginning of the loan agreement. As the interest decreases in relation to the amount left due, payment on interest decreases as well so that later payments are less towards interest and more towards the loan.

Vehicle Financing

Credit Score

Your credit score is a number that represents your credit history. Credit scores are created by looking at your past financial activities, like previous loans, payment histories, debts, and any bankruptcies. This number lets the lender determine how reliable you will be paying off a loan, and generally affects the loan agreement.

Co-Signer

A co-signer is a person who signs the loan agreement along with you, the loan applicant. The co-signer agrees to take on partial responsibility for the loan and will be responsible for paying it off if you fail to do so.

Refinancing

Refinancing is a process where you get a new loan to pay off the original auto loan. This is an attractive option because it may allow you to find a new option with better monthly payments and lower interest, which allows you to save money.

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