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Why do finance companies charge higher interest rates than commercial banks?
Wiki User
∙ 15y ago
Because they offer a higher rate of interest to their deposit customers.
Loan Interest is the chief source of income for all banks & financial institutions. The difference in the rate of interest offered to deposit customers and loan customers is usually the profit a bank makes. Usually people prefer banks when compared to financial institutions to deposit their money. So to attract customers these institutions offer a higher rate of interest on deposits with them. In order to maintain their profit margin, they charge a higher rate of interest on their loan customers.
So, higher the rate on deposits, higher is the rate on loans.
Wiki User
∙ 15y ago
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Why do finance companies charge such high rates of interest?
If a company has adopted 'Table A', it can charge interest on calls-in-arrears at the rate of
What is finance charge?
A finance charge is interest charged by a lender on the unpaid balance of a loan.
What is a finance charge?
A finance charge is interest charged by a lender on the unpaid balance of a loan.
Can a company that is not a finance company charge interest and finance charges to someone it has lent money?
Yes.
What is the federally regulated maximum interest rate that a finance company can charge on a loan in the year 2011?
continuation of question that would be the maximum interest rate that a finance co can charge in the year 2011.
What is the difference between a service charge and a finance charge?
A service charge is typically a charge for a specific action that a company performs on an account or an order. A finance charge is an amount of interest that is charged on an amount of principal owed by a customer.
Can a car finance company charge interest once the principal is paid?
yes it can
How do you calculate finance charge?
multi the unpaid balance by the monthly interest rate
How does a company calculate the finance charge on a mobile trailer?
i need to know how a calculation of finance charge was figured out. it is a original loan at 18,084 for 12 yrs at 5.75% interest.
The amount of interest a store charges a customer for buying on the installment plan?
Finance charge
What are the interest costs and other fees for using a credit card called?
finance charge
How much interest is legal to charge for buying a vacuum?
If you buy it outright, there is no interest charged. if you finance it, laws on this vary by jurisdiction.
