If an escrow agent is used in both cash and credit sales of real estate and the agent's charge is $100 in a cash transaction and $150 in a credit transaction, only $50 is a finance charge.Ģ. If the charge in a credit transaction exceeds the charge imposed in a comparable cash transaction, only the difference is a finance charge. Charges for a required maintenance or service contract imposed only in a credit transaction. Fees for preparing a Truth in Lending disclosure statement, if permitted by law (for example, the Real Estate Settlement Procedures Act prohibits such charges in certain transactions secured by real property).Ĭ. Inspection and handling fees for the staged disbursement of construction-loan proceeds.ī. In contrast, the following items are finance charges:Ī. Charges for a service policy, auto club membership, or policy of insurance against latent defects offered to or required of both cash and credit customers for the same price. This is the case even if an individual must pay cash to obtain the discount, provided that credit customers who are members of the group and do not qualify for the discount pay no more than the nonmember cash customers.ĭ. ![]() ![]() Discounts available to a particular group of consumers because they meet certain criteria, such as being members of an organization or having accounts at a particular financial institution. Discounts that are available to cash and credit customers, such as quantity discounts.Ĭ. Taxes, license fees, or registration fees paid by both cash and credit customers.ī. For example, the following items are not finance charges:Ī. ![]() A creditor financing the sale of property or services may compare charges with those payable in a similar cash transaction by the seller of the property or service. In determining whether an item is a finance charge, the creditor should compare the credit transaction in question with a similar cash transaction. Charges imposed uniformly in cash and credit transactions are not finance charges. To automatically insert related values in the resulting finance charge text, enter the following placeholders in the Text field.1. If there are no foreign currency finance charge conditions set up, the LCY finance charge conditions specified on the Finance Charge Terms page will be used and then converted to the relevant currency.įor each finance charge term, you can specify text that will be printed before ( Beginning Text) or after ( Ending Text) on the entries on the finance charge memo.Ĭhoose the Beginning Text or Ending Text actions respectively, and fill on the Finance Charge Text page. When you create finance charges in a foreign currency, the foreign currency conditions that you set up here will be used to create finance charge memos. Terms page, define for each term a currency code and an additional fee. You can define additional fees in foreign currencies for each term on the Finance Charge Terms page. To use more than one combination of finance charge terms, set up a code for each one.įor each finance charge term, you can specify individual conditions that can include additional fees in both LCY and in foreign currency. ![]() To set up finance charge termsĬhoose the icon, enter Finance Charge Terms, and then choose the related link. For each set of finance charge terms, you can define a beginning and/or an ending text to include on the finance charge memo. The finance charge is a percentage of the overdue amount:īalance Due method - Finance Charge = Overdue Amount x (Interest Rate / 100)Īdditionally, each term in the Finance Charge Terms table is linked to a subtable, the Finance Charge Text table. The number of days the payment is overdue is taken into account:Īverage Daily Balance method - Finance Charge = Overdue Amount x (Days Overdue / Interest Period) x (Interest Rate/100) Charge Terms Code field on the Customer page.įinance charges can be calculated using either the average daily balance or the balance due methods. You must set up finance charge terms for each finance charge calculation, and then assign the terms to the customer in the Fin. Charge Terms Code field on customer cards. But first, you must set up a code that represents each finance charge calculation. You can inform customers of the added charges by sending finance charge memos. When a customer does not pay by the due date, you can have finance charges calculated automatically and add them to the overdue amounts on the customer's account.
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