Okuzeka
Finance & Banking vocabulary · Loans & Credit

Down payment

Meaning in finance & banking, with examples

nounCore term

In finance & banking, down payment means: The part of the price of a house, car or other large purchase that the buyer pays in cash at the start, with the rest usually covered by a loan.

In Turkish: peşinat, ön ödeme

How it is used

Used in mortgage and car finance. Buyers save for, make or put down a down payment. A larger down payment means a smaller loan and lower risk for the bank. Regulators in many countries, including Türkiye, can limit how much of a home's or car's value may be financed, which sets a minimum down payment.

Example sentences

  1. They made a 30% down payment and borrowed the rest from the bank.

  2. First-time buyers often find it hard to save for a down payment.

Common collocations

  • make a down payment
  • put down a down payment
  • minimum down payment
  • save for a down payment
  • mortgageA long-term loan used to buy a home or other property. The property secures the loan, so the lender can have it sold if the borrower does not repay.
  • loanMoney that a bank or another lender gives to a person or company, which must be paid back over time, usually with interest.
  • collateralAn asset, such as property, cash or securities, that a borrower pledges to a lender and that the lender can sell if the loan is not repaid.
  • secured loanA loan backed by an asset, such as a house, car or deposit, that the lender can take and sell if the borrower does not repay.
  • installmentOne of a series of regular payments used to repay a loan or to pay for something bought on credit.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Loans & Credit

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This page explains English vocabulary for learners. It is not financial advice.