Foamy is God asked:
Q=My Disclosure says that if I will pay the loan off early, I will not be entitled to a refund part of the
finance charge. What does this mean?
A=This means that you will be charged interest for the period of time in which you used the money
loaned to you. Your prepaid finance charges are generally not refundable, nor is any interest which
is already paid!?!?!?
I don’t understand
Gertrude
Q=My Disclosure says that if I will pay the loan off early, I will not be entitled to a refund part of the
finance charge. What does this mean?
A=This means that you will be charged interest for the period of time in which you used the money
loaned to you. Your prepaid finance charges are generally not refundable, nor is any interest which
is already paid!?!?!?
I don’t understand
Gertrude
Maria
It means, the annual interest that you pay for each month’s payment will not be refunded if you pay off early.
It looks confusing, but its a DUH question because of course you wouldn’t get back money you paid. Don’t let it confuse you. It simply means that you won’t get any early payment financing refunded.
Darryl
You don’t need to worry about this. Years and years ago a little old lady thought she would get some of the interest back from her mortgage since she paid it off early. So, now they have to put in this silly disclosure. All it means is that they won’t refund you interest from previous months…which is really kind of a “duh” statement.
Your finance charges may include the loan origination fee of a few hundred bucks. They are just telling you that you aren’t getting any of this money back if for some reason you pay off the loan or refinance it. It is VERY basic and VERY standard language. It is NOT saying that you have to keep paying interest or anything crazy like that.
Suzanne
Let me guess, you paid points and some origination fees that are seen as a part of the finance charges (interest). If you pay off the loan early you get no refund of those already paid fees. No big deal just legal CYA statement for the lender.