Understanding a loan offer
APR, term, total cost of borrowing and the disclosure statement, explained in plain language for Alberta car buyers.
A car loan offer comes down to a handful of numbers. Once you know what each one means, you can compare offers fairly and spot anything that doesn't belong.
The words to know
- Disclosure statement
- The document your lender or dealer must give you before you finalize the loan. It shows the total cost of borrowing (FCAC).
- Amount financed
- What you're borrowing, including anything rolled into the loan.
- Credit charge (cost of borrowing)
- What the loan costs you in dollars over the full term. Alberta's Consumer Protection Act requires it to be written out in dollars (AMVIC).
- APR
- The cost of borrowing as a yearly percentage. Compare APR to APR.
- Term
- How long you'll be paying. Longer terms mean lower payments but usually more interest overall (FCAC).
Read our line-by-line guide: Reading a car loan offer.
Guides in this section
Illustrative imageUnderstanding a loan offer
Reading a car loan offer: APR, term and total cost of borrowing
A line-by-line guide to the disclosure statement on an Alberta car loan: what APR, term, cost of borrowing and add-ons mean, and how to compare two offers fairly.