Payments - Some Terms to know
Here are some terms you'll encounter in this section. By familiarizing yourself with them, you'll be that much more equipped to make an informed decision when you sit down at the dealership.
Down Payment: Money used to pay down the principle balance of a loan. May be required by some lenders.
Annual Percentage Rate: The cost of credit as a yearly rate.
Term: How long the loan is for in number of months.
Monthly Payment: What the loan will cost you each month to repay it in the set term.
Contract: The binding legal agreement that obligates you to repay the loan. Or, the binding legal agreement that gets you your motorcycle. All a matter of perspective.
Truth In Lending: The Truth in Lending Disclosure Statement is located near the top of any installment contract. It includes the Annual Percentage Rate, Finance Charge, Amount Financed, and Total of Payments. The law states that a Finance Manager only has to show you these, but a good Finance Manager will completely review and explain the Truth in Lending Disclosure.
Application: This document provides all of the information needed by the lenders for you to Apply for a loan with them. It gives them permission to pull your Credit Bureau, and use that information in the decision making process to determine whether or not to give you a loan. It includes, but not limited to, Name, Address, How long you have lived at this address, Phone #, Birthday, Social Security #, Place of Business, Business Phone, How long have you worked there, Income, and References.
Privacy Notice: All lenders are required to present you with their Privacy Notice. This document sets forth the terms under which they share or do not share your personal information. It also discloses what they do internally with your information. Make sure that you are provided with a privacy notice from your lender.
Default: You will be in Default if any payment or any sum is not paid when it is due, if you sell the unit without paying or contacting the lienholder, use of the unit in an illegal activity, or let the required insurance lapse.
Negative Equity: You owe more for the motorcycle than you can trade it or sell it for.
