1) If you buy from a car yard, the dealer might offer to arrange finance for you. This may seem more convenient, but it is usually cheaper to get a loan elsewhere - e.g. Banks, Building Societies, Credit Unions. Shop around to find the best deal for you. a) Dealer finance b) Default c) Insurance premium d) Fees and charges 2) Interest is paid at a fixed rate over the term of a loan or investment. a) Interest b) Interest rate c) Fixed rate d) Repayment 3) A financial institution that you enter into a credit contract with - for example, the organization that provides your car loan. a) Unsecured loan b) Credit provider c) Early termination fee d) Secured loan 4) The costs a credit provider charges you to use their services. a) Fees and charges b) Insurance policy c) Dealer finance d) Repayment 5) A loan that is backed by an asset. The credit provider may sell the secured asset to get its money back if you cannot repay the loan. a) Early termination fee b) Insurance policy c) Secured loan d) Guarantor 6) Money charged by an insurance company for coverage. a) Insurance premium b) Guarantor c) Secured loan d) Dealer finance 7) The relationship between the amount of money borrowed and the money paid in return for the use of that money. It is usually expressed as a percentage per year ('annual rate') - for example, 10% per year. a) Credit provider b) Interest rate c) Default d) Fixed rate 8) A written legal agreement that sets out what is being insured and for how much. a) Guarantor b) Insurance policy c) Secured loan d) Early termination fee 9) A person who guarantees a loan for someone else. The guarantor is legally responsible for paying the debt if the borrower stops paying. a) Guarantor b) Interest c) Credit provider d) Fees and charges 10) A loan for which no asset has been used as security. The interest rate is usually higher than for a secured loan as there is a higher risk to the lender of not getting their money back. a) Fixed rate b) Interest rate c) Insurance policy d) Unsecured loan 11) To be made for a loan within an agreed amount of time; usually between 12 months to 5 years. If your loan has a fixed rate, your repayments will be the same each month. a) Insurance premium b) Dealer finance c) Repayment d) Fees and charges 12) When your loan repayment is late, or you do not pay. a) Interest rate b) Default c) Guarantor d) Dealer finance 13) Payment for the use of money over time. If you borrow money, interest is the amount you pay to borrow the money. The rate of interest can be fixed or variable. It is usually calculated as a percentage of the amount lent or borrowed. For example, on a $10,000 car loan that has an interest rate of 10%, you would pay $1000 interest in the first year. a) Interest b) Interest rate c) Repayment d) Credit provider 14) A fee which may be applied if a loan is repaid earlier than the stated term. a) Insurance policy b) Interest c) Early termination fee d) Fixed rate

Helpful car loan terminology

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