Commonly Used Financing Terms and Frequently Asked Questions

Trailer financing refers to the process of obtaining funds to purchase a trailer, which is a vehicle used for transporting goods or materials. If you are considering trailer financing, here are some key points to keep in mind:

Down Payment: Depending on the lender and your creditworthiness, a down payment may be required for trailer financing. The down payment is an upfront payment made towards the total cost of the trailer and can vary from lender to lender. Be prepared to allocate funds for a down payment if necessary.

Interest Rates and Terms: Interest rates for trailer financing can vary based on factors such as your credit score, the loan amount, the length of the loan or lease term, and the lender's policies. It's important to review the interest rates, repayment terms, and any additional fees or charges associated with the financing offer to ensure it aligns with your financial capabilities.

Creditworthiness: Lenders typically assess your creditworthiness when determining your eligibility for trailer financing. They will review your credit history, credit score, income, and other relevant financial information. A good credit score can help you secure more favorable loan terms, including lower interest rates and longer repayment periods.

Insurance Requirements: In most cases, lenders will require you to have insurance coverage for the financed trailer. This is to protect their investment in case of accidents, theft, or damage. Before finalizing the financing, you should inquire about the specific insurance requirements and factor the associated costs into your budget.

What is Fixed Rate Financing?
Fixed Rate Financing is where the finance rate stays the same over the life of the auto loan, making your repayments precisely the same over the life of your loan.

What is APR or Annual Percentage Rate?
APR is the interest rate attributed annually on the outstanding balance of your auto loan.

What is my APR rate based upon?
Many parameters define trailer loan APR rates. One variable is current economic bank rates, another is credit history, a third is your down payment on the trailer loan, a fourth is the total amount you choose to finance, as well as the type of vehicle you're financing and the length of your financing contract.

Who is the Assignee?
The assignee is the bank that purchases your trailer loan from Leonard Truck and Trailer.

How does vehicle financing work?
Vehicle financing involves borrowing money from a lender to purchase a vehicle. The lender pays the full cost of the vehicle upfront, and you repay the loan amount in monthly installments over a predetermined period, usually with added interest.

What factors determine my eligibility for vehicle financing?
Lenders typically consider factors such as your credit score, income, employment history, and debt-to-income ratio when determining your eligibility for vehicle financing. These factors help them assess your ability to repay the loan.

How much can I borrow for a vehicle?
The amount you can borrow for a vehicle depends on several factors, including your creditworthiness, income, the value of the vehicle, and the specific lender's policies. It's advisable to get pre-approved or pre-qualified by a lender to understand the loan amount you may qualify for.

What is the difference between a down payment and a trade-in?
A down payment is an upfront payment made towards the purchase price of the vehicle. It reduces the loan amount and is typically a percentage of the vehicle's total cost. On the other hand, a trade-in involves exchanging your current vehicle for a credit towards the purchase price of the new vehicle.

What is the difference between interest rate and APR?
The interest rate is the cost of borrowing the money for the vehicle loan, expressed as a percentage. The annual percentage rate (APR) includes the interest rate plus any additional fees or charges associated with the loan, providing a more comprehensive representation of the total cost of borrowing.

What is the loan term, and how does it affect my monthly payments?
The loan term refers to the length of time you have to repay the loan. Longer loan terms result in lower monthly payments but may cost more in interest over the life of the loan. Shorter loan terms have higher monthly payments but can save you money on interest.

What happens if I can't make my monthly payments?
If you're unable to make your monthly payments, you should contact your lender immediately to discuss your situation. They may offer alternatives such as payment extensions, loan modifications, or refinancing options to help you manage the payments and avoid defaulting on the loan.

Can I pay off my loan early?
Yes, most vehicle loans allow for early repayment without penalty. Paying off your loan early can save you money on interest and give you ownership of the vehicle sooner. However, always check the loan terms and confirm with your lender to ensure there are no prepayment penalties.

Why should I consider financing a vehicle even when I can pay cash for it?
While paying cash for a vehicle has its advantages, there are several reasons why you might still consider financing a vehicle, even if you have the funds to purchase it outright. Here are some reasons to consider financing: