APR is the rate of how much it costs to borrow money over a year plus other fees like loan origination fees. Generally speaking, this means that your APR will be higher than your interest rate inmost cases where origination fees are present.
The auto loan lender is the institution that loans you the money to buy your car. They can be a third-party bank, credit union, finance company, or other Federal Deposit Insurance Corporation (FDIC) member. Also, some car dealerships offer in-house lending. In contrast, other dealerships will resell your loan contract to a third-party lending institution.
The car loan amount is the money you borrowed to buy your car, which you pay back over the loan length.
The car loan interest rate is the interest the lender charges you for using their money to buy or refinance your car. It is a percentage of the principal amount you borrowed.
The car loan payment is the amount you pay every month. Your payment goes toward paying off the auto loan amount as well as the interest on the loan. Payments are made for each month of the loan's term and pay down the principal value of the loan.
The car loan term is the loan length measured over several months. Typical loan terms are 36, 48, 60, 72, and 75 months. You must pay on your auto loan every month for the term's length.
Refinancing your car loan substitutes your old auto loan with a new loan. You can refinance to find a more favorable term and/or rate. Refinancing completes when a new lender pays off your loan from the old lender, takes over the debt, and accepts your monthly car payments.
The asset you pledge to secure the loan, in this case, your car.
A credit score is a number that measures the likelihood of you paying off your financial obligations. It is measured by a combination of factors, including your available credit limits, the number of bank accounts you have, outstanding debts owed, payment history, length of history, and other credit-related things.
The difference between the current value of your car and the amount you owe on your car loan.
Additional charges you may face if you miss a loan payment.
A co-borrower enters the loan contract with you—usually a family member, spouse, or partner. Your co-borrower shares the same responsibility for paying back the loan and can help you qualify for a better interest rate.
The financial institution or company that provides you with the loan to refinance your car. When you refinance with RateWorks, we are your lender.
The total amount you need to pay to your current lender to completely pay off your existing car loan.
The process of getting an estimate of what kind of loan you could qualify for based on your credit score and other financial factors.
The process of replacing your existing car loan with a new one, typically with better terms and a lower interest rate.
Refinancing with RateWorks can unlock the potential to reduce your monthly car payments and save money hassle-free!
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Ready to dive deeper into how RateWorks can help you save big on your auto loan? Discover all the answers on our FAQ page.