Important Terms You Should Know About Car Loans

Most people who buy a car get a loan to pay for at least part of the cost. If you are taking out a loan to buy an automobile, it helps to know some of the terminology. Here are some of the common terms you might encounter when taking out an auto loan in San Jose, CA.

Principal

The principal is the amount of money that you are borrowing. This is not the same as the amount of money you will pay back.

Interest Rate

When you borrow money, you pay interest, which means you pay back more than you borrow. The interest rate is expressed as a percentage and determines how much you pay back.

Annual Percentage Rate

The annual percentage rate, or APR, is essentially the interest rate based on an annual basis. It may not match up perfectly with the interest rate.

If you are looking for a car loan, we here at United Imports are here to help.

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