Glossary of Auto Loan Terms
(U)
Underwriting
Similar to establish credit worthiness, underwriting is a
determination of whether the potential buyer is a good risk and
whether the money is likely to be repaid in a timely manner.
Upfront costs
Upfront costs are costs that must be paid at the time the deal is
made. This may include closing costs but could also include
insurance if the buyer doesn’t already have a policy in effect.
Upside-down
This is a term referring to the fact that you owe more on your
vehicle than it is worth. Typically, this occurs when you finance
the full purchase price with little or nothing down, meaning you
still owe the entire purchase price plus the cost of tax and
licensing, but have driven the vehicle so that it now qualifies as a
“used car.”
Usury Law
The usury law is a statute that oversees lending practices to
protect lenders from those who would charge exorbitant interest
rates or make other harsh terms. Usury is, put simply, the same as
an interest rate but those who believe that a fee for the use of
money is unlawful typically use the word “usury.”
Usury Limit
The amount set by the government declaring a specific interest rate
to be the maximum allowed by law. The usury limit is important to
those who have poor credit because lenders who will extend loans to
those high-risk borrower cannot take advantage of the situation. |
