Pierre Money Mart Blog

Term in months
Term in months for your lease or your loan.

Total savings
Total amount you would save in interest if you made the accelerated payment until your contract was paid in full.

Total purchase price (before tax)
This is the total cost of your vehicle purchase. Include the sale price, any additional options and any destination charges. Don’t include sales tax in this amount. Sales tax will be calculated for you and included in your total after tax price.

Trade allowance
The total amount that you are given for any automobile that you trade-in as part of the purchase. In some states a trade-in can also reduce the amount of sales tax you will owe. See the definition for “Sales tax deduction for trade-in” for more information on trade-in vehicles and sales tax.

Trade Equity
The difference between the value of your trade and the lenders lien payoff.

Unapplied for Credit
Items that you did not initiate a request for credit. These items only show up on your credit report if you don’t pay them. Example include utility and medical bills, bad checks, and collection agency accounts.

Upside-Down
The difference between the lien payoff and the value of your trade. This is a Negative Number

Write Off
Items that the original creditor has given up on trying to collect. Often these Write Offs will show up twice on a credit report, once from the original creditor as Applied for Credit, and once from a collection agency as Unapplied for Credit.

Sales tax rate
Percentage sales tax to be charged on this purchase. Sales tax is included in each lease payment. Sales tax for buying is charged on the total sale amount.

Simple Interest
A flat rate of interest that is not compounded, generally expressed as an annual rate. One day of simple interest is calculated by: loan balance x interest rate = daily amount of interest 365 (days in a year).

State and Federal tax rates
Your state and federal marginal income tax rates. These rates are used to determine the tax savings associated with a home equity loan.

Stipulations (STIPS)
Documentation may be required to prove items on your initial credit application.

Market value of vehicle
Value of your auto after the lease term is over.

Minimum Down Payment
Few lenders will approve an auto loan for someone with bad credit without a down payment.

Monthly accelerated payment
Scheduled payment plus additional monthly payment.

Monthly loan payment
Monthly principal and interest payment (PI).

Monthly scheduled payment
Monthly principal and interest payment based on your original loan amount, term and interest rate.

Mortgage Statement
Lenders may require a photocopy of your most recent mortgage statement is to verify your monthly mortgage obligation.

Payment to Income Ratio
Your monthly car payment compared to your gross monthly income. Most lenders prefer this ratio to be less than 15%.

Payment
Payments received are first applied to (collection) fees, then to accrued interest, and finally to the outstanding principal balance.

Percent of purchase price
Check this to put a percent of the purchase price as your cash down. This money will be used for fees and your down payment.

Principal
The amount borrowed, or the amount on which you pay interest and must pay back, which may increase as a result of capitalization of interest.

Principal Balance
The portion of the original loan, plus capitalized interest, which the borrower has not yet satisfied through payment or cancellation.