BANKING AFFAIRS

Detailed explanation-1: -A finance charge refers to any type of cost that is incurred by borrowing money. Finance charges exist in the form of a percentage fee, such as annual interest, or as a flat fee, such as a transaction fee or account maintenance fee.

Detailed explanation-2: -This is due to interest and fees, which is what a lender charges you for the use of its money. It is also referred to as a finance charge. A finance charge is the dollar amount that the loan will cost you. Lenders generally charge what is known as simple interest.

Detailed explanation-3: -The finance charge is the total dollar amount of all interest and fees you pay for the use of credit.

Detailed explanation-4: -Principal The amount of money you agreed to borrow is considered the principal. As you repay your loan, the principal balance decreases. The principal amount does not include the interest you owe.

Detailed explanation-5: -A finance charge is the total amount of interest and loan charges you would pay over the entire life of the mortgage loan. This assumes that you keep the loan through the full term until it matures (when the last payment needs to be paid) and includes all pre-paid loan charges.