Finance Charge

Business, Legal & Accounting Glossary

Definition: Finance Charge



Full Definition of Finance Charge


A finance charge is any charge levied for the use of credit. For example, credit cards carry a finance charge, calculated as a percentage of the amount borrowed. A finance charge is levied periodically, often once a month. The finance charge is prorated, based on the annual percentage rate of the account. Automobile loans, home mortgages, business loans, and other uses of credit are subject to finance charges. With some accounts, an additional finance charge will be applied when payment is late. A lender is legally allowed to change the finance charge for any of several reasons, e.g., the borrower being high risk. Under the federal Truth-in-Lending Act, the terms of finance charges must be spelt out in writing.


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https://payrollheaven.com/define/finance-charge/
Modern Language Association (MLA):
Finance Charge. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. July 08, 2020 https://payrollheaven.com/define/finance-charge/.
Chicago Manual of Style (CMS):
Finance Charge. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/finance-charge/ (accessed: July 08, 2020).
American Psychological Association (APA):
Finance Charge. PayrollHeaven.com. Retrieved July 08, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/finance-charge/

Definition Sources


Definitions for Finance Charge are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 9th February, 2020 | 4 Views.