If you want to be able to find the best car loan for your budget and requirements you could benefit from expert loan advice. This could help you to better understand the market. There are a number of terms used that can confuse and overwhelm newcomers.

If you don’t know what things mean then you need to get some more loan advice. You must never agree to any kind of new credit product if you don’t know what terms refer to. This could result in you taking out a loan that is not suitable for you or is more expensive than you first thought.

Car Loan Glossary

You can find out lots more useful loan advice online. The Internet makes information widely available and easy to find. You can learn more about the different types of loans and also the terms used in financial paperwork. This is a good way of ensuring you make informed decisions about which loans deals, are the best car loan deals for you.

To help get you started here are just a few of the basic terms used in the car finance market:

• Amortization – this is just a formal word to describe the repayment of your car loan in instalments. With most of the best car loan deals, instalments will be monthly and these will be made up of two parts – the capital (loan amount borrowed) and also a percentage towards interest. In some loans, you may have to pay all the interest off first before you can start working on the capital.

• APR – this stands for the Annual Percentage Rate and is simply the amount of overall interest at which the lender will offer to loan you money. The APR must be clearly labelled on all loan products and you will need to compare rates to find the best car loan deals. If you are confused by APR deals, then seek further loan advice.

• Base Price – this refers to the cost of a new car before any dealer options are offered (extended warrantees, alloy wheels, in-car gadgets etc.).

• Breach of Contract – when you sign up to one of the best car loan deals you will be entering into a legally binding contract. This means if you fail to uphold your responsibilities (such as meeting your monthly repayments) then you will have violated your legal obligations. You will in effect be in ‘Breach of Contract’.

It is important you understand all the terms used in the finance markets. This will help you to ensure you are making the right choices so get all the loan advice you need before making a decision.

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