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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.
What else can I help you with?
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 a finance charge?
A finance charge is interest charged by a lender on the unpaid balance of a loan.
What is 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.
Calculate the finance charge on a credit card balance of 3299.19 at a monthly rate of 1.2.?
To calculate the finance charge, multiply the credit card balance by the monthly interest rate. For a balance of $3,299.19 at a monthly rate of 1.2% (0.012), the finance charge is: Finance Charge = $3,299.19 × 0.012 = $39.59. Therefore, the finance charge for that month is approximately $39.59.
How do you calculate finance charge?
multi the unpaid balance by the monthly interest rate
Can a car finance company charge interest once the principal is paid?
yes it can
How is the finance charge on an auto loan calculated?
The finance charge on an auto loan is calculated based on the interest rate and the outstanding principal balance of the loan. It is typically determined using the formula: Finance Charge = Principal Balance × Interest Rate × Time. The interest rate can be expressed as an annual percentage rate (APR), which is then divided by the number of periods (months) in a year to find the monthly rate. Additional fees and charges may also be included in the total finance charge.
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.
What are the interest costs and other fees for using a credit card called?
finance charge
