Terms To Know When Shopping For An Installment Loan
Annual Percentage Rate (APR) — The finance charge of your loan expressed as an annual rate.
Credit Insurance — Can be health, life, accident, or involuntary unemployment coverage designed to pay the monthly payment or the outstanding balance of the debt. Such coverage is optional and will involve and additional monthly fee.
Finance Charge — The total dollar amount you pay to use credit.
Fixed-Rate Loan — The interest rate and the payment remain the same over the life of the loan. The consumer makes equal monthly payments of principal and interest until the debt is paid in full.
Late Charge or Delinquency Charge — When you make your payment after the due date. There is usually a number of days after the payment is due that you can pay without a late charge. In Indiana, a delinquency charge cannot be imposed until it has been delinquent for more than ten days.
Principal — The amount of money you are borrowing.
Total of Payments — The total dollar amount you will have paid at the end of the loan term( assuming all payments have been made according to the schedule.) This amount includes the loan amount and the interest payments plus other costs in the finance charge.
Total Sale Price — The total cost of your purchase on credit including your down payment.
Variable Rate Loan — The interest rte changes over the life of the loan, resulting in possible changes in the monthly payments, loan term, and/or principal. Some plans have rate or payment caps so your interest rate or payment cannot go above a fixed amount.