Comparison Rate
Also known as the True Interest Rate, a comparison rate is a tool to help consumers identify the true cost of a loan, including the Interest Rate and some fees and charges relating to a loan.
In Australia the term Comparison Rate is defined under law in the Consumer Credit Code, and includes the amount of the loan, the term of the loan, the repayment frequency, the interest rate and all fees and charges except government charges (such as stamp duty), fees which may or may not be charged (such as early payout fees) and fees not ascertainable at the time the comparison rate is provided.
Comparison Rates are designed to provide an effective way to compare different loans as come close to reflecting the “real” interest rate of the loan, however it is important to remember that they do not include variable charges such as early payout penalties (which can be significant).
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Car Lease
See Finance Lease.
Car Loan
A personal finance product where the financier lends the customer funds for the purchase of a car or other vehicle, and secures the loan against that vehicle.
Chattel Mortgage
A commercial car finance product under which the customer takes ownership of the vehicle at the time of purchase, and the financier takes out a mortgage over the vehicle (chattel) as security.
CHP
Acronym for Commercial Hire Purchase. See Commercial Hire Purchase.
Commercial Hire Purchase
A commercial finance product where the customer hires a car or commercial vehicle from the financier for a fixed monthly repayment over a set period of time.
Consumer Loan
See Car Loan.