Down payment
from class: Math for Non-Math Majors Definition A down payment is an initial, upfront payment made when purchasing a car or other high-value item. It reduces the amount of money that needs to be financed through a loan or lease.
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Predict what's on your test 5 Must Know Facts For Your Next Test The size of the down payment can affect the interest rate and monthly payments on a car loan. Larger down payments typically result in lower monthly payments and less interest paid over time. Down payments are usually expressed as a percentage of the total purchase price of the car. Some leases also require a down payment, often called a capitalized cost reduction. A higher down payment can sometimes help buyers qualify for financing if they have poor credit. Review Questions How does making a larger down payment impact your monthly car loan payments? What is another term used for a down payment in the context of leasing a car? Why might someone with poor credit choose to make a higher down payment? "Down payment" also found in:
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