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Loan Glossary

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Earnest Money
Earnest money is money given by the consumer to the seller to show that they are serious about the purchase. This is included in the purchase price.
Elderly Applicant
An elderly applicant is someone who is 62 years of age or older as stated in the Equal Credit Opportunity Act.
Electronic Fund Transfer (EFT) Systems
Electronic Fund Transfer or EFT Systems are a way to transfer money electronically instead of by using a check.
Employment Insurance
Employment insurance covers your monthly payment if you loose your job involuntarily but unfortunately this is not available in every state.
Equal Credit Opportunity Act (ECOA)
The Equal Credit Opportunity Act or ECOA is a federal law that prohibits lenders from discriminating based off of someone’s race, color, religion, national origin, age, sex, marital status or if the person receives some type of financial assistance from a public source.
Equity
Equity is the difference in what is owed on a vehicle and how much the vehicle is worth.
Extended Service Contract
An extended service contract will cover repairs on a vehicle that are not related to normal wear and tear. The customer will normally have a deductible on each visit.
Extended Warranty
An extended warranty covers certain problems with the vehicle that are outlined in the contract after the manufacturer’s warranty has expired.
Extension
An extension is a change that is made to the loan causing the duration of the loan to be longer.
Fair Credit Reporting Act
The fair credit reporting act is a law that protects the consumer by having guidelines that creditors and reporting agencies must follow to exchange or correct information on one’s credit report.
Fair Market Value
Fair market value is the amount that is agreed upon by the buyer and seller as being a reasonable price for the vehicle.
FDIC
FDIC stands for Federal Deposit Insurance Corporation.
Finance Charge
A finance charge is the amount that credit will cost the borrower.
Finance Company
A finance company is a business that loans a borrower funds and the borrower pays them back based on the terms of the contract.

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