Glossary of Terms

We know some auto loan terms can be confusing, so we've put together a useful glossary to better help you understand the industry language.

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Annual Percentage Rate

The Annual Percentage Rate, or APR, of an auto loan is the amount of interest charged yearly by a financial institution. Rates depend on the individual’s credit and key loan characteristics, including amount, term and vehicle age. A representative example of payment terms are as follows: A loan amount of $20,000 with an APR of 7.50% and a term of 70 months, would have a monthly payment of $353.63 with no down-payment required.

Auto Equity Loan

Often referred to as a title loan, this type of loan uses the equity you have in your vehicle in exchange for your title. You receive a cash loan and upon repayment the lender returns your car title.

Bad Credit

“Bad” or “Poor” credit generally is considered a FICO score around 600 and below by sources including the Consumer Federation of America and National Credit Reporting Association (reported by the Associated Press),,, Investopedia, and others. The Congressional Budget Office identifies a FICO score of 620 as the “cutoff” for prime loans. FICO scores are not the sole factor in lending decisions by Santander Consumer USA.

Balloon Payment

A balloon payment can make monthly payments lower on an auto loan, but require a large payment to be made at the end of the car loan.

Bill of Sale

A document prepared by the seller or dealership to record the details of a vehicle sale.

Black Book

Similar to Kelley Blue Book, Black Book is a collection of information about the value of a car, truck or SUV. Black Book bases the value of the car on data collected from wholesale car auctions.