When you come to Leadcar Buick GMC Utica in Utica, NY to buy a new or pre-owned vehicle, most likely you will finance your purchase. Our finance department knows that some of these terms can be confusing. Here are a few of them to help you understand what your loan is all about.
The lender is the institution that loans you the money for the purchase, which could be a bank, credit union, or even the financial division of the manufacturer. The principal is the amount on the vehicle loaned to you, while the maturity or term is the date where you must pay off the balance.
APR is the annual percentage rate, which is the most common number you will see, while amortization is the process by which your payments are credited to the loan principal. Some loans have variable percentage rates that are lower at the beginning of the term and go higher as the loan progresses.