Finance Charge


Also found in: Financial, Wikipedia.

Finance Charge

The amount owed to a lender by a purchaser-debtor to be allowed to pay for goods purchased over a series of installments, as opposed to one lump sum at the time of the sale or billing.

A finance charge, sometimes called the cost of credit, is expressed as an annual interest rate levied upon the purchase price. It does not include any amounts that the lender might require for insurance premiums, delinquency charges, attorney's fees, court costs, collection expenses, or official fees that might be incurred should the debtor default in the repayment of the debt.

Federal and state "truth-in-lending" laws mandate that the complete cost of finance charges be fully disclosed on credit agreements and billing statements.

Cross-references

Consumer Credit Protection Act.

References in periodicals archive ?
Subprime specialist issuers universally set the minimum finance charge at $1.
The shortfall in payment of 12 Fils resulted in a finance charge of Dh35.
You must receive, in writing, the finance charge (a dollar amount) and the annual percentage rate or APR (the cost of credit on a yearly basis).
Shoppers pay 10 percent of an item's value, then have 60 days to pay it off, with no finance charge.
During such an amortization event, finance charge collections normally allocated to the seller will become available to cover trust expenses through a structural feature that fixes the finance charge allocation based upon pre-amortization invested amounts.
We will calculate finance charges on cash advances by multiplying the 'average daily balance of cash advances' by the total number of days in the billing cycle, and multiplying the product by the daily periodic rate of finance charge then in effect.
As a part of Group One, series 2007-2 will share excess finance charge and principal collections with other Group One series.
Plaintiffs allege that by imposing a finance charge that purports to be justified by the $33 exception to the general 36% limitation on a series of two-week loans -- producing finance charges in the hundreds of dollars and an effective annual percentage rate in triple digits -- the lenders violated the rate restrictions in the Indiana Uniform Consumer Credit Code.
My credit card bill recently showed up with a zero balance and a 50-cents finance charge along with a $25 late charge.
Although the focus of the hearings was HOEPA, there was also discussion of TILA's finance charge and the APR.
As a part of Group One, Series 2007-1 will share excess finance charge and principal collections with other Group One series.
In return, you pay a finance charge or "discount fee" on the total amount of the receivables--a process called factoring.

Full browser ?