What is the difference between a service charge and a finance charge?

a.

A service charge is a fee which must be paid every month, while a finance charge is a one-time fee assessed at the beginning or end of a loan period.

b.

A service charge is a flat fee charged to a borrower, while a finance charge is a fee charged to a borrower based on the amount borrowed.

c.

A service charge is a fee assessed by a lender, while a finance charge is a fee charged by a financial institution, such as a bank.

d.

A service charge is a fee assessed by a lender other than interest, and a finance charge is the total of the interest paid on a loan and the service charge.

((I have the answer but I want to make sure it is completely accurate))

Question

Alfonso Vega

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2 May, 02:14

What is the difference between a service charge and a finance charge?

a.

A service charge is a fee which must be paid every month, while a finance charge is a one-time fee assessed at the beginning or end of a loan period.

b.

A service charge is a flat fee charged to a borrower, while a finance charge is a fee charged to a borrower based on the amount borrowed.

c.

A service charge is a fee assessed by a lender, while a finance charge is a fee charged by a financial institution, such as a bank.

d.

A service charge is a fee assessed by a lender other than interest, and a finance charge is the total of the interest paid on a loan and the service charge.

((I have the answer but I want to make sure it is completely accurate))

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Answers (1)

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Olive Dorsey · Answer 1

b. A service charge is a flat fee charged to a borrower, while finance charge is a fee charged based on the amount borrowed.

Service charges are standard charges assessed to pay for business costs; finance charges vary depending on the amount borrowed.