Credit Basics
What is Title Insurance?
Title insurance is required by lenders. It is protection for the buyer and lender if there are complications with the title after the deal has been made.
What is a lien holder?
A lien holder is the institution (usually a bank) that has the right to take and hold or sell the property of a debtor as security or payment for a debt borrowed from them.
Should I use a home equity loan instead of an auto loan?
Home equity loans are a great alternative to auto loans. You can get a lower interest rate with a home equity loan than you can with an auto loan. What makes it even better is that the interest you pay on a home loan may be tax deductible.
What is the difference between APR and the interest rate of a loan?
The interest rate on a loan is the cost in repaying the amount you borrowed, multiplied by a certain percentage that the bank charges you for the time it takes you to pay it back. The APR includes all the costs the bank charges you plus the interest rate and the amount of the loan. When comparing interest rates from lender to lender, you want to look at the APR.
What is loan-to-value-ratio?
The loan-to-value ratio is a comparison of the loan amount to the value of the vehicle. The value of a vehicle can be found by consulting an auto industry pricing guide such as NADA or Kelley Blue Book.
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