The term used for modifying a car loan. This is different from refinancing in the sense that you are taking your existing loan and rewriting it, not opening a new loan and paying off the old loan.

SURRENDER-To voluntarily give possession of your vehicle back to the

finance company or dealer. This option will negatively affect your credit,

however, a slightly better option than repossession

MARKET VALUE- Market value is a concept distinct from market price,

which is "the price at which one can transact", while market value is "the

true underlying value" according to theoretical standards. Actually, this is

what your car is truly worth

CAPTIVE FINANCE COMPANY-A subsidiary whose purpose is to provide

financing to customers buying the parent company's product. The captive

finance company is usually wholly owned by the parent company. Although

there are numerous examples of these, the best ones occur in the

automotive industry. Each of the "big three" automakers has a captive

finance company. General Motors has General Motors Acceptance

Corporation (GMAC), Daimler Chrysler has Chrysler Financial, and the

Ford Motor Company has Ford Motor Credit Company (FMCC).

UPSIDE-DOWN-To owe more than what the vehicle is truly worth. For

example- I owe $22,984 for the total buy out of my car, but the market

value is only $16,500.

LOSS MITAGATION DEPARTMENT-The Loss Mitigation dept is where

the lender is willing to work with the consumer either by refinancing, limited

hardship, loan modifications etc. When trying to negotiate any principal

reduction or rate reduction this is the department you must contact, NOT

CUSTOMER SERVICE!!!

AMORTIZATION-The process of increasing, or accounting for, an amount

over a period of time. In other words, the allocation of a lump sum amount

to different time periods, particularly for loans and other forms of finance,

including related interest or other finance charges. Assume we sell 100

products at a $1 each + one off tooling charge of $50. The customer gets

billed $100 product + $50 tooling or we can amortize it and they pay $1.50

each for the 100 off. Costs them the same it is just a way of putting the charges onto the product that they actually belong too.

RE-FI - Short for refinance. Refinancing may be undertaken to reduce

interest rate/interest costs (by refinancing at a lower rate), to extend the

repayment time, to pay off other debt(s), to reduce one's periodic payment

obligations (sometimes by taking a longer-term loan), to reduce or alter risk

(such as by refinancing from a variable-rate to a fixed-rate loan), and/or to

raise cash for investment, consumption, or the payment of a dividend. In

essence, refinancing can alter the monthly payments owed on the loan

either by changing the loan's interest rate, or by altering the term to

maturity of the loan. More favorable lending conditions may reduce overall borrowing costs. Refinancing is used in most cases to improve overall cash

flow.