Amortize: To make payments in regular installments over the term of the loan.

Appreciation: When an asset gains in value over a time period.

APR (annual percentage rate), Interest Rate: The interest rate (usually stated as a yearly rate) charged to the consumer for borrowing money from a bank or lender. APR is usually expressed as a percentage.

Asset: The value of an item owned by you.

Collateral: Assets that are used to secure a loan. If the borrower is unable to repay a loan, the assets used to secure the loan are turned over.

Default: When a borrower fails to meet the terms of a loan.

Depreciation: When the value of an asset declines in value due to time or use.

Equity: When the value of an asset is greater than the loan balance remaining on the asset.

Interest: The amount paid by the borrow, to a lender for borrowing money.

Liabilities: Loans or financial obligations owned to a bank or lending institution.

Lien: A legal claim on an asset until the debt or obligation has been satisfied.

Vehicle Lien: Is a vehicle (Asset) that has been attached as collateral on a loan obligation. The Title of the vehicle usually lists the individual(s) as the registered owner and the Bank or lending institution as the lien holder.

Lien-Free Vehicle: Is a vehicle that has no outstanding loan obligation.

Loan-to-Value Ratio: The relationship between the amount of the loan and the appraised value of the vehicle, expressed as a percentage.

Monthly Payment: The calculated monthly payment terms (including principal and interest) paid on a monthly basis over the life of the loan.

Negative Equity: When the value of an asset is less then the remaining balance of the loan on that asset.

Net Worth: The total value of an asset, less (minus) the remaining balance of the lien (liabilities) on those assets.

Principal: The initial borrowed loan amount.