Loan Glossary
Debt Defender is a voluntary payment protection product that helps preserve your family’s standard of living and helps give you relief from financial burdens if a protected life event such as disability, loss of life or involuntary unemployment affects you. Debt Defender will protect up to two borrowers.
Disability - A voluntary form of payment protection designed to make a member's monthly payment, up to the contract maximum, should they become totally disabled due to a medically determined sickness or injury and are unable to work.
Loss of Life - A voluntary form of payment protection designed to pay off an outstanding loan balance in the event a covered member dies before the loan is repaid, up to contract maximum.
Involuntary Unemployment - A voluntary form of payment protection designed to make a member's monthly payment, up to the contract maximum, should they become unemployed through no fault of their own.
Guaranteed Asset Protection (GAP) Plus can help fill the gap between what your vehicle insurance will pay and what you owe on your loan, if your vehicle is deemed a total loss. GAP Plus may cancel part of your next loan with your credit union, when you purchase a replacement vehicle.
Included with this coverage is deductible assistance which will reimburse a members' deductible in the form of a credit to the loan balance up to a maximum of $1,000 where allowed by state law when a comprehensive or collision claim is paid through the members' primary auto insurance carrier and a deductible is incurred.
Upside Down
When a consumer owes more on their loan than the collateral’s value. Also referred to as being “under water”.
Extended Warranties
Also referred to as service contracts or service agreements, extended warranties can vary by cost and coverage. Always read the fine print to determine if the cost of the extended warranty will provide you with the expected benefits to avoid future complaints to the Better Business Bureau.
Leasing a Vehicle
When you lease a vehicle, you are making monthly payments for a set period of time. When that time frame is up, the vehicle is returned to the dealership. The monthly payments cover the value of the vehicle for the duration of the lease, which is the anticipated depreciation during the lease term. You still need to pay sales tax and title fees when leasing a vehicle.
A subsidized loan is a government loan for undergraduate students. This type of loan does not accrue interest while you are in school or during the grace period. Subsidized loans are based on financial need.
An unsubsidized loan is a government loan available to undergraduate and graduate students as well as the parents of students. Interest begins to accrue as soon as the loan is disbursed.