AUTOMOBILE LOAN Meaning and
Definition
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An automobile loan is a type of financial arrangement in which a borrower obtains a specific amount of money from a lender to purchase a vehicle. It is a specific kind of loan that is designed to finance the purchase of automobiles, generally including cars, trucks, vans, and motorcycles.
The borrower, in need of financial assistance to acquire a vehicle, applies for an automobile loan from a financial institution such as a bank, credit union, or online lending platform. The loan is typically disbursed in a lump sum payment directly to the borrower or, more commonly, to the dealership or seller. The borrower then repays the loan amount, plus interest, over a specified period of time through regular installment payments.
The interest rate attached to an automobile loan can either be fixed or variable, depending on the terms outlined by the lender. The rate is determined based on various factors, including the borrower's creditworthiness, the loan duration, and the current market conditions.
In cases where the borrower fails to make timely payments or defaults on the loan, the lender may repossess the vehicle as collateral to recover the outstanding loan balance. It is important for borrowers to thoroughly understand the terms and conditions of an automobile loan before entering into an agreement to ensure they can meet the financial obligations.
Common Misspellings for AUTOMOBILE LOAN
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Etymology of AUTOMOBILE LOAN
The word "automobile loan" does not have a specific etymology as it is a combination of two terms:
1. "Automobile" - The term "automobile" is derived from the Greek word "αὐτός" (autos) meaning "self" and the Latin word "mobilis" meaning "movable". The word "automobile" was coined to describe a self-propelled vehicle that can carry people or goods.
2. "Loan" - The term "loan" has its roots in the Middle English word "lone", which originally meant "to lend" or "lending". It can be traced back to the Old Norse word "lān", meaning "gift" or "loan".
When combined, "automobile loan" simply refers to a financial agreement where money is borrowed to purchase a vehicle, specifically an automobile.
Similar spelling words for AUTOMOBILE LOAN
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