Bankrate's financial glossary
Did you run across an unfamiliar term when applying for a mortgage, credit card
or auto loan? Find the meaning here, along with definitions of other financial words
and phrases, in Bankrate.com's financial glossary.
Auto loan and leasing terms
A fee charged by some auto leasing companies for originating the loan, just as mortgage lenders charge points as an origination fee. This fee is often not specified in a contract, but rolled into the capitalized cost when calculating monthly payments.
Actual cash value
The amount of money that a broker or dealer has invested in the purchase and repair of a used vehicle.
Interest that is computed at the beginning of the loan, then added to the principal, so that all must be repaid, even if the loan is paid off early.
Also known as options. These are features added on to the car often by the dealer such as a CD stereo, anti-theft system, detailing and undercoating. Some items are purely decorative, known as "mop and glow," and do not add any value to the car.
Additional principal payment
Extra money included with a loan payment to pay off the amount owed faster. Over time, this practice reduces the amount of interest paid.
A person who evaluates an insurance claim and determines the amount to be paid.
The payment of a debt in installments over an agreed-upon period, during which principal and interest are paid off.
A detailed table showing the amortization of a loan which includes the beginning principal amount, period payments, the interest portion of each payment, the principal reduction portion each payment, and the ending balance.
Mathematical formula for calculating a borrower's monthly payments, based on the amount borrowed, the interest rate and the term of the loan.