Click to return to BOL home page
Banker Store Read A Reg BOL Insiders Career Connect Learning Connect Bankers Information Network


    Site Map

    Our Sponsors


Compliance Gurus
Lending Gurus
Operations Gurus
Security Gurus
Technology Gurus
eBanking Gurus

Print Friendly! Email This Article! Discuss NOW!

Loan Fees & APR
Answer by Andy Zavoina and Richard Insley, BOL Guru

Question: When you have a loan administrative fee or a loan fee how do you disclose the APR? The fee is not included in with the amount financed, but is included in with the finance charge and it does raise the APR. For example a loan of $4,000.00 at a rate of 6.90%, $20.00 loan administrative fee, has an APR of 7.1596%. A loan at $5,000.00 at a rate of 6.90%, $20.00 loan fee, has an APR of 7.1061%. If you are running a loan special what APR do you use if they are different?

Answer by Andy Zavoina:
You are correct that the admin fee needs to be included in your advertising.

226.24 Advertising.
4. Use of examples. Footnote 49 authorizes the use of illustrative credit transactions to make the necessary disclosures under 226.24(c)(2). That is, where a range of possible combinations of credit terms is offered, the advertisement may use examples of typical transactions, so long as each example contains all of the applicable terms required by 226.24(c). The examples must be labeled as such and must reflect representative credit terms that are made available by the creditor to present and prospective customers.

Answer by Richard Insley:
Use a typical loan amount and resist the temptation to use a large loan example that dilutes the effect of the flat fee.

First published on 10/7/02

Home | Compliance | Lending | Operations | Security | Marketing | Technology | eBanking
BOL Archives    Privacy Policy    Important Disclaimer   Recommend This Site !   Contact Us

BankersOnline is a free service made possible by the generous support of our advertisers and sponsors. Advertisers and sponsors are not responsible for site content. Please help us keep BankersOnline FREE to all banking professionals. Support our advertisers and sponsors by clicking through to learn more about their products and services.