what is a finance charge on a loan

Best answer


A finance charge is a cost imposed on a consumer who obtains credit.Finance charges include interest charges,late fees,loan processing fees,or any other cost that goes beyond repaying the amount borrowed.For many forms of credit,the finance charge fluctuates as market conditions and prime rates change.

People also ask


  • What are the finance charges on a car loan?

  • Car loans have finance charges, which are best described as the cost of borrowing money to pay for a car. This includes both interest and the fees associated with borrowing, such as origination fees, clerical fees, and other fees.

  • What is’finance charge’?

  • What is ‘Finance Charge’. A finance charge is a fee charged for the use of credit or the extension of existing credit. It may be a flat fee or a percentage of borrowings, with percentage-based finance charges being the most common.

  • Are finance charges and interest charges the same thing?

  • That鈥檚 very astute of you to recognize that finance charges aren鈥檛 necessarily the same as interest charges. Car loans have finance charges, which are best described as the cost of borrowing money to pay for a car. This includes both interest and the fees associated with borrowing, such as origination fees, clerical fees, and other fees.

  • What types of finance charges are there?

  • Other finance charges are assessed as a flat fee. These types of finance charges include things such as annual fees for credit cards, account maintenance fees, late fees charged for making loan or credit card payments past the due date, and account transaction fees.

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