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Loan Glossary

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Marketable Title
A marketable title is where a person owns the vehicle outright and there are no liens on the title or any other issues. The seller is free to sell the title with no obligation to any other company.
Mark-up
Mark-up is the difference between what the dealer bought the car for and the amount of money that the dealer sells the car for.
Maturity Date
The maturity date is the date that the loan will be paid off.
Monroney Sticker
The monroney sticker shows what the MSRP is on the vehicle as well as the list of options and is required for all new vehicles by federal law.
Monthly Payment
The monthly payment is the amount of interest and principal on the loan that the borrower is responsible to pay by a certain date.
MSRP
The manufacturer’s suggested retail price or “MSRP” is the amount that the manufacturer recommends selling the vehicle for.
NADA
NADA stands for the National Automobile Dealer Association. NADA helps with legal issues and regulations and performs research on different aspects of the automobile industry to help improve the industry.
Negative Amortization
Negative amortization is when the monthly payment does not cover the interest owed and the unpaid interest is added to the unpaid balance of the loan. In some cases a borrower could owe more than the original amount borrowed. This is also called deferred interest.
Negative Equity
Negative equity is when a person owes more on a vehicle than the vehicle is worth.
Net Effective Income
Someone’s net effective income is their total income after taxes.
Net Worth
Net worth is the value of their assets less their debt.
Odometer
An odometer keeps track of the automobile’s mileage.
Open Credit
Open credit is required to be fully paid monthly.
Open-End Credit
Open-end credit is a reusable line of credit, such as a credit card.
Open-End Lease
An open-end lease is where a person may owe a balloon payment at the end of the lease depending on the condition of the property once it is turned back in.
Optional Equipment
Optional equipment is equipment that is not on the basic model of the car but the consumer can choose to have it included for a higher price.

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