To accumulate interest charges.

The repayment of a loan by installments with regular payments to cover the principal and interest.

Amortization Table
A table showing the amount of a principal and interest due at regular payment intervals and the corresponding unpaid balance of the loan after each payment.

Amortization Term
The amount of time required to amortize the loan. The amortization term is expressed as a number of months. For example, for a 3-year fixed-rate loan, the amortization term is 36 months.

Amount Financed
The agreed-upon sale price of the boat/ATV/UTV/RV in a finance contract, plus any charges for accessories, taxes, title and registration, government fees, optional products (for example, service contracts and boat/vehicle or payment protection products), less any down payment and/or net trade-in allowance. This is the amount that is subject to finance charges.

Annual Percentage Rate (APR)
The Annual Percentage Rate (APR) is a yearly rate of interest that includes all of the fees and expenses paid to acquire the loan. A term used in the Truth-in-Lending Act to represent the percentage relationship of the total finance charge to the amount of the loan.

An initial written statement of personal and financial information required for an evaluation of creditworthiness.

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Basis Point
An interest rate or yield expressed as 1/100 of one percent.

Before-tax Income
Income before taxes are deducted.

The person designated to receive the income from a trust, estate, or a deed of trust.

Black Book
Refer to Book Value.

Book Value
The value of a used boat/vehicle in a specific market area. A recognized wholesale appraisal guidebook, such as the NADA Guide, provides guidance on the boat/vehicle value at any given time. The Book Value assigned by a dealer will reflect the boat/vehicle condition as well as prevailing market environment which will modify the value reflected in the guidebook.

The individual that obtains credit from a lender with the understanding that it will be repaid, with interest, within a clearly defined schedule.

An individual who purchases a boat/vehicle. This individual is primarily liable for repayment of the loan and has ownership rights in the property purchased.

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Cash Price
The price at which a seller offers to sell the property or service that is the subject of the transaction.

Certificate of Title
A document issued by a state to provide evidence of boat/vehicle ownership and any lien holder's security interest.

Clear Title
A title that is free of liens or legal questions as to ownership of the property.

An individual who purchases a boat/vehicle (property) jointly with a Buyer. This individual is jointly liable for repayment of the loan and has ownership rights in the property purchased.

A second owner of the boa/vehicle (property).

An individual who agrees to pay the amount due (payment) and to perform all the agreements stated on the contract if the buyer fails to meet contractual obligations.

An asset (such as a boat) that guarantees repayment of a loan. The borrower risks losing the asset if the loat is not repaid according to the terms of the loan contract.

Collision Insurance
Insurance that provides coverage against the loss or damange to property arising out of the ownership or use of the property. Collision coverage would cover losses associated with a collision.

Comprehensive Insurance
A coverage which pays for property loss, caused by force other than collision, such as fire, theft, vandalism, flood and hail.

Consumer Credit
Credit offered or extended to a consumer primarily for personal, family or household purposes.

Consumer Credit Protection Act
See Truth-in-Lending Act.

Consumer Reporting Agency (or Bureau)
An organization that prepares reports used by lenders to determine a potential borrower's credit history. The agency obtains data for these reports from a credit repository, as well as from other sources.

An agreement in which a borrower receives something of value in exchange for a promise to repay the lender at a later date.

A person or institution who extends credit and to whom the obligation is payable.

Credit Bureau
An organization that gathers consumer credit information. There are three major credit bureaus: Equifax, Experian, and TransUnion.

Credit Disability Insurance
An insurance policy that provides protection to the borrower in the event the borrower becomes medically disabled and is not capable of making their loan payment. The insurance company will make payments on a monthly basis according to the terms of the policy.

Credit History
A record of an individual's open fully repaid and unpaid debts. A credit history helps a lender to determine whether a potential borrower has a history of repaying debts in a timely manner.

Credit Life Insurance
An insurance policy that may be purchased by the borrower to provide protection in the event of death. The insurance company may pay off the account according to the terms of the policy. This protects the borrower's estate from the liability of the debt.

Credit Report
A report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness.

Credit Score
A numeric assessment used to evaluate the amount of "risk" involved in a credit transaction. It involves the evaluation of credit quality based on the information provided in the consumer's application, the proposed loan structure and the consumer's credit report.

Determination of a consumer's eligibility to borrow money. This information is based on the number of accounts opened, the types of accounts, payment history and account balances.

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An amount owed to another.

Failure to comply with the terms of a loan contract. If a borrower defaults on a loan, the lender may seize the collateral, liquidate (sell) it, and apply proceeds to the loan balance.

The failure to make a loan payment on time.

A decline in the value of an boat/vehicle (property) over time.

Destination Charge
The price added to the price of a boat/vehicle for transporting it from the manufacturer to the dealer.

Direct Financing
A loan is originated directly between a lender and a consumer. Compare to Indirect Financing.

Down Payment
The amount of cash or net trade-in allowance applied to reduce the cash sales price of a boat/vehicle. Many creditors require a down payment of 10 to 20 percent of the amount to be financed. However, the required down payment can be less, depending on the buyer's credit history, ability to repay and other criteria. A down payment helps lower the monthly payment as well as establish equity for the buyer in the boat/vehicle.

Due Date
The date in a given month that a loan payment is due.

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Effective Gross Income
Normal annual income including overtime that is regular or guaranteed. The income may be from more than one source. Salary is generally the principal source, but other income may qualify if it is significant and stable.

Electronic Funds Transfer (EFT)
A process that allows either the lender or the borrower to transfer funds or payments electronically between respective bank accounts.

A person who signs ownership interest over to another party.

Equal Credit Opportunity Act (ECOA)
A federal law that requires lenders and other creditors to make credit equally available without discrimination based on race, color, religion, national origin, age, sex, marital status, or receipt of income from public assistance programs.

Extended Service Contract
A contract that covers specified breakdowns after a manufacturer's warranty expires. Manufacturers and independent companies sell extended warranties.

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The most commonly used credit scores generated by the credit bureaus are often referred to as "FICO® scores", even though each of the three major credit bureaus has its own name for these scores. FICO® stands for Fair Isaac and Company, the company that produces the software used by many credit bureaus to calculate your credit score. These scores range from 300–850, the higher, the better.

Fair Credit Reporting Act

A consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one's credit record.

Fair Market Value
The amount that a willing buyer would pay at a given point in time for the boat/vehicle (property) in a realistic transaction.

Finance Charge
The cost of consumer credit expressed as a dollar amount.

Finance Company
An institution that finances purchases repayable in installments.

First Monthly Payment
First montly payment on financed transactoins are typically scheduled in arrears, therefore the first monthly payment will be due at the end of the first month after date of delivery. Because payment arrangements may vary based on individual circumstances, be sure to verify with your dealer when your first monthly payment will be due.

Fixed Rate Loan
A loan in which the interest rate remains constant throughout the life of a loan.

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Guaranteed Asset Protection (GAP)
A product that pays any remaining balance owed on a loan after payment of a total loss insurance claim.

One who agrees to pay the debt of another.

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Hull Identification Number (HIN)
An individual serial number assigned by the manufacturer to a boat. An alphanumeric number of multiple digits, it is affixed permanently to the boat hull. See also Serial Number.

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Indirect Financing
A loan that is originated by a dealership and subsequently assigned to a financial institution.

The mechanical and physical evaluation of a boat/vehicle.

Installment Plan
A method of buying a boat/vehicle (property) on credit and making payments at regular intervals for a specific period of time.

The assumption of risk of another party's financial loss.

Insurance Premium
The payment made to an insurance company to cover the cost of insurance.

The cost of borrowing money, usually stated in terms of a percentage.

Interest Rate
The interest rate is a part of the annual percentage rate (APR) equation. Interest is the annual rate of return that the lender receives on the Principal of the loan.

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Late Fee
A charge assessed by a lender for payments received after a specific due date.

The individual or organization that lends funds to a borrower with the understanding that those funds will be repaid, with interest, based on a clearly defined schedule. It can be a bank, credit union, or finance broker offering or referring the loan.

Liability Insurance
Protection for the policyholder, up to an agreed amount, for sums payable to another for personal (bodily) injury or property damage.

A security interest in property, such as a boat/vehicle, to secure the payment of an obligation.

Lien Holder
The individual or company holding a security interest in collateral to ensure repayment of a loan.

Lien Perfection
The process of ensuring that the lien holder is correctly identified on the title.

Money lent to a consumer to be repaid over a period of time.

Loan Balance
The amount owed on a loan after deducting the amount of payments made.

Loan Contract
The written agreement between a borrower and a lender that identifies the terms of the loan.

Loan Term
This is the length of the loan, usually broken down into months (24, 36, etc.). Reducing the loan term will increase the monthly payments; increasing the loan term will lower the monthly payment and increase the total amount to be repaid due to interest accrued.

Loan-to-Value Ratio (LTV)
A ratio used to determine the amount of money a lender will loan based on the value of the boat/vehicle. It is calculated by dividing the loan amount by the Retail Value.

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The original producer of a boat/vehicle. Examples include Tracker Marine Group, Arctic Cat.

Manufacturer's Suggested Retail Price (MSRP)
The retail price of the boat/vehicle as recommended by the manufacturer. Also see No Haggle-No Hassle Pricing.

Maturity Date
The date on which the balance of the loan becomes due and payable.

Monthly Payment
The amount of principal and interest the borrower is obligated to pay each month.

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No Haggle-No Hassle Pricing
TRACKER, SUN TRACKER, NITRO and TAHOE boats are sold under a nationally published pricing policy that is honored at all authorized dealer locations for these brands within the United States. Dealer Prep, Destination Charges, licensing, registration, documentation and other fees that vary by location are in addition to published prices.

Non-Prime Lender
A lending institution that loans money to individuals with a financially challenged credit history. The risk factor on this type of loan is greater, thus resulting in higher interest rates in order to compensate for the high risk factor.

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The legal responsibility of a borrower to repay a loan.

Features that are added to a base model. For boats, examples include higher horsepower engines, wake-board towers, canvas covers. Options are also referred to as add-ons.

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Preferred Placement Form
The form that is completed with an individual's financial information in order to submit and search for the best matched lender to the individual's specific credit needs.

The amount of the loan without the interest factored in. In other words, the amount you are financing and will be paying interest on.

Principal Balance
The unpaid balance (remainder) of a loan.

Promise to Pay
The agreement by the borrower to repay the current payment amount and date to be paid.

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The ability to meet a lender's criteria for granting credit.

A price that represents the cost of a specific item, such as a loan rate, service contract, price of an insurance policy and so on.

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The annual rate of interest on a loan, expressed as a percentage of 100.

Regulation Z
A regulation that implements the Truth-In-Lending Act. It applies to all lenders and requires disclosure of credit terms.

Retail Blue Book Value
The value of a used boat/vehicle in a specific market area. See Book Value.

Retail Installment Sales Contract (Finance Contract)
A contract for the sale of the boat/vehicle between the seller and the buyer, in which the seller agrees to finance the sale under the terms set forth in the contract. The dealer is the seller and creditor on the contract, which is later assigned to a secondary finance source, such as a bank.

Retail Price
The amount the buyer pays the seller for a boat/vehicle.

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Sales Price
The agreed-upon value of a financed boat/vehicle, between the seller and purchaser.

Secured Loan
A loan that is secured by collateral.

Assets or personal property pledged as collateral to secure a loan.

Security Interest
An interest in property that secures performance of a credit obligation.

Serial Number
An individual serial number assigned by the manufacturer to a boat/motor/trailer. Often an alphanumeric number of multiple digits, it is affixed permanently to the boat/motor/trailer. See also Hull Identification Number (HIN)
Service Contract
These are contracts that provide financial coverage to repair or replace failures or breakdown within the limits of the policy.

Simple Interest

A method of calculating interest due by applying a periodic rate to the outstanding balance on a daily basis. Simple interest is calculated only on the principal amount, or on that portion of the principal amount which remains unpaid. As payments are received they are applied first to the accrued interest and then to the principal amount.

Substitution of Collateral
The substitution of a comparably valued boat/vehicle (property).

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A percentage of the final sales price that is required to be paid to local, state, and/or federal government entities.

The period of time which covers the life of the loan. For example, a 3 year fixed loan has a term of 3 years or 36 months.

The evidence one has of right to possession. See Certificate of Title.

A boat/vehcile exchanged for a credit amount on the purchase of a new (boat/vehicle) item.

Trade-In Allowance
A credit amount given to a customer upon purchase of a new boat/vehicle, in exchange for their old boat/vehicle (property). This credit amount may reduce the cash price of the new purchase.

Trade-In Value
The value of a boat/vehicle credited toward the purchase of another boat/vehicle.

Truth-In-Lending Act
A federal law requiring a disclosure of credit terms using a standard format. This is intended to facilitate comparisons between the lending terms of different financial institutions.

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The process of verifying data and approving a loan or insurance policy.

Usury Law
A law that sets the maximum interest rate that can be charged on a loan.

Usury Limit
The maximum interest rate allowed by law in a given state.

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A guarantee from the dealer or manufacturer that a product will perform as expected or specified. Warranties usually cover specific mechanical problems for a specific amount of time or other measure of usage.

Wholesale Book Value
The amount the dealership usually pays for a used boat in markets other than retail, typically auctions and broker transactions.

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