Thread Starter: Anonymous
Title: Re: APR on single payment loan <1 year
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I am running our periodic check of our TIL disclosures vs the FFIEC APR tool. This is the loan I entered:
Amount financed: $1475
Disclosed APR 20.706
Disclosed Finance Charge 151.45
Single payment 1626.45
loan date: 1/22/2021
payment date 7/22/21
And I am getting the result that our APR is overstated by .1704%.
Now, I did some calculations and figured out the issue. The finance charge is 10.268% of the amount financed. Since the loan term is 6 months, 10.268 *2 = 20.5356%. This is what FFIEC APR tool is saying the APR should be.
Our system is looking at it as 181 days out of 354 (feb and its rebel 28 days being included adds some additonal compexity). So the 10.268 is multiplied by 2.016 and that's where we got out 20.706% APR.
My problem now is trying to decipher appendix J of Reg Z. One section makes me think there is just one way to calculate it, one makes me think there are alternates allowed. Simply put: is our alternative method allowable?
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