• Terms Starting With "A"
Acceleration Clause
In case the borrower does not repay his loan, the lender has a choice to speed up the rate of loan. This clause helps the entire amount of loan to be paid off immediately.
Agreement of Sale
It determines the terms and conditions under which the buyer is buying and the seller is selling. Later, both the parties sign the contract.
Amortization
The process of writing off or liquidating an asset or loan periodically on an installment basis is called Amortization.
Appraisal
The estimation of the value of a property is called Appraisal. A professional appraiser makes it.
Asset
It is a valuable resource owned by a business that can be used to repay any debts.
Automated Teller Machine (ATM)
It is an electronic terminal through which customers can withdraw, check balance, and deposit money in a much easier and quicker way.
• Terms Starting With "B"
Base Price
Base Price is the cost of a car. It is also called "Sticker Price".
Billing Error
It refers to error or mistake in the monthly billing statements of a customer.
Broker
A Broker is one who assists in the arrangement of funding and in the negotiation of contracts.
Business Days
These refer to days when a company is open for trading purposes.
• Terms Starting With "C"
Certificate of Title
A certificate of ownership issued by the Department of Motor Vehicles is called Certificate of Title.
Closing
When the buyer, the seller and the lender negotiate on property and funds, it is called "closing" or "settlement".
Cloud (On Title)
Cloud refers to an outstanding claim, which has a negative impact on the marketability of
title.
Collateral
Properties or assets that are offered to secure a loan or other credit is known as Collateral.
Commission
A charge assessed by a real estate agent or a broker for a service rendered is called Commission.
Consignor
A consignor is one who signs on behalf of the borrower of the loan and shares equal responsibility for it. This actually happens when the principal borrower does not have enough credit to take on the loan responsibility himself.
Credit Analysis
This refers to the process of determining whether an applicant satisfies the credit standards of a firm and the amount of credit that should be extended to him.
Credit Bureau
An organization to which business firms apply for credit information on prospective customers is known as Credit Bureau.
Credit Card
It is a plastic card having a magnetic strip issued by a bank, which authorizes the holder to buy goods or services on borrowed money. For e.g. Visa, MasterCard, etc.
Credit Period
This refers to time given to a buyer to make full payment for credit purchases beyond the expiry of which the payment becomes outstanding.
Credit Policy
This entails norms and guidelines to determine whether and how much credit is to be extended to a customer.
Credit Scoring System
This system provides a rating for all credit applicants on the basis of various characteristics in regards to creditworthiness.
Credit Terms
These terms represent the repayment terms extended by a firm to its debtors.
Creditor
A person to whom money is owed is called a "Creditor".
• Terms Starting With "D"
Debit Card
A Debit Card is a card that enables the holder to withdraw money or to have the cost of purchases charged directly to the holder's bank account. In case of debit cards, customers do not require going to the bank to remove the cash from their account and can just go any ATM for the same.
Default
Failure of repayment of loan is known as Default.
Dealer Holdback
This is offered by the manufacturer to the dealer allowing the latter to purchase a vehicle at a lower price as compared to the invoice price.
Down Payment
Payment made at the time of purchase of a vehicle is called Down Payment. The balance is to be paid later.
Disclosure
Disclosing relevant information about the vehicle to the consumer is called Disclosure.
• Terms Starting With "E"
Electronic Fund Transfer Systems
It refers to a system whereby funds can be transferred electronically rather than by cheque.
Equal Credit Opportunity Act
According to this Act, all kinds of borrowers should be treated equally.
Escrow
Holding of assets or securities by another party is called Escrow.
• Terms Starting With "F"
Financial Analysis
Evaluation of the financial position of a firm is known as Financial Analysis.
Financial Leverage
The extent to which interest on debt magnifies changes in operating income into even greater proportionate changes in earnings after taxes is called Financial Leverage. It is also known as "Trading on Equity".
• Terms Starting With "G"
Gas Guzzler Tax
An additional tax on the sale of vehicles that have poor fuel economy is termed as Gas Guzzler Tax.
Gross Monthly Income
The total monthly income before taking taxes or deductions into account is called Gross Monthly Income.
Guarantee
It refers to a pledge whereby one person assumes responsibility for paying another"s debts.
• Terms Starting With "H"
Hazard Insurance
In this type of insurance, the insurer protects the insured against losses such as fire, windstorm and the like.
• Terms Starting With "I"
Impound
This means taking temporary possession of as a security by legal authority.
Interest
It refers to charge by the lender on the borrowing money, typically expressed as an annual percentage rate.
• Terms Starting With "J"
Joint Account
It is an account shared by two or more people to share legal responsibilities in the repayment of loans or debts.
• Terms Starting With "L"
Lessee
One that holds a lease is termed as Lessee.
Lessor
One that lets property under a lease is termed as Lessor.
• Terms
Starting With "M"
MSRP
Manufacturer"s Suggested Retail Price
• Terms Starting With "N"
Net Effective Income
Income after all expenses and taxes have been deducted is called Net Effective Income.
• Terms Starting With "P"
Point-of-Sale (POS)
A
physical location where the consumer makes a purchase is called Point-of-Sale (POS).
A customer can also make payments electronically through this mechanism.
Prepayment Penalty
Those who make early payment of loans are required to pay penalty imposed by a bank called Prepayment Penalty.
• Terms Starting With "R"
Rescission
Rescission means the cancellation of a contract.
Refinancing
This refers to a process whereby an existing loan can be paid from the proceeds of a new loan at a lower interest rate.
• Terms Starting With "S"
Service Charge
These charges are related to the financial aspects of processing a loan.
Solvency
The capacity of a firm to meet its pecuniary obligations is called "Solvency".
• Terms Starting With "T"
Tax
It is a charge levied on the cost of a vehicle.
Title Search
It refers to a proper examination of municipal and public records to confirm the legal ownership of a property.
Trustee
A trustee is responsible for managing assets for the benefit of someone else.
• Terms Starting With "U"
Underwriting
The process of issuing insurance policies is called Underwriting.
Upside-down
When the loan amount is greater than the present value of a vehicle, it is termed as Upside-down.
• Terms Starting With "V"
Verification of Employment
It refers to a written verification by the employer to his employee giving the salary and job details in it.
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