FAQs: Making Payments
What does "PTI" stand for?
The payment-to-income (PTI) ratio is a percentage that describes your car payment in relation to your pre-tax income. As an example, if your monthly car payment is $300 and your gross monthly income is $3,000, then your PTI is 10%. Lenders usually look for a PTI that sits at around 15% when considering how large to make a loan, but this is just one of a host of factors that go into the process of securing the best financing options your unique situation.
What does "LTV" stand for?
The loan-to-value (LTV) ratio is a tool used by lenders to represent the amount of money owed on your loan relative to the value of your vehicle. For example, if you currently have a loan for $15,000 on a vehicle that is worth $20,000, your LTV is 75%.
If you owe more than your current vehicle is worth, your LTV will need to be addressed. Clement Auto Group has decades of experience assisting car shoppers through this exact situation.
What does "DTI" stand for?
The debt-to-income (DTI) ratio represents all of your monthly debt divided by your monthly income. Credit card payments, mortgage payments, and other recurring expenses are factored into this metric, which most lenders suggest keeping at or below 50%.
What does "ACV" stand for?
"ACV" stands for the actual cash value. ACV is used to describe the amount of money a car can be expected to sell for through the large auction networks right now. This is the amount that we can expect to recoup should we choose to sell your car at auction.
What does "APR" stand for?
"APR" stands for the annual percentage rate. Typically referring to the interest rate of your car loan. This yearly interest rate is what you'll pay in addition to the amount you borrow initially, and can be fixed (unchanging for the duration of your loan term) or variable (may change over the life of the loan).
What does "POR" stand for?
"POR" stands for proof of residency and is a tool that aids our stable of high-quality lenders confirm your residency during the car loan application process. Some common examples of proof of residency include:
- Vehicle registration or title
- Voter registration card
- Utility or telephone bill
- Selective Service card
- Checking or savings account statement
What does "POI" stand for?
"POI" stands for proof of income and is a metric that helps our associated lenders verify your stated income during the loan application process. Some common examples of proof of income include:
- Pay stubs
- Bank statements
- Last year's federal tax return
- Form W-2