(2) (A) The “amount financed”, using that term, which shall be the amount of credit of which the consumer has actual use. This amount shall be computed as follows, but the computations need not be disclosed and shall not be disclosed with the disclosures conspicuously segregated in accordance with subsection (b)(1): (i) take the principal amount of the loan or the cash price less downpayment and trade-in; (ii) add any charges which are not part of the finance charge or of the principal amount of the loan and which are financed by the consumer, including the cost of any items excluded from the finance charge pursuant to section 1605 of this title ; and (iii) subtract any charges which are part of the finance charge but which will be paid by the consumer before or at the time of the consummation of the transaction, or have been withheld from the proceeds of the credit. (B) In conjunction with the disclosure of the amount financed, a creditor shall provide a statement of the consumer’s right to obtain, upon a written request, a written itemization of the amount financed. The statement shall include spaces for a “yes” and “no” indication to be initialed by the consumer to indicate whether the consumer wants a written itemization of the amount financed. Upon receiving an affirmative indication, the creditor shall provide, at the time other disclosures are required to be furnished, a written itemization of the amount financed. For the purposes of this subparagraph, “itemization of the amount financed” means a disclosure of the following items, to the extent applicable: (i) the amount that is or will be paid directly to the consumer; (ii) the amount that is or will be credited to the consumer’s account to discharge obligations owed to the creditor; (iii) each amount that is or will be paid to third persons by the creditor on the consumer’s behalf, together with an identification of or reference to the third person; and (iv) the total amount of any charges described in the preceding subparagraph (A)(iii).
FAQs
Definition: itemization of the amount financed from 15 USC § 1638(a)(2) | LII? ›
For the purposes of this subparagraph, “itemization of the amount financed” means a disclosure of the following items, to the extent applicable: (i) the amount that is or will be paid directly to the consumer; (ii) the amount that is or will be credited to the consumer's account to discharge obligations owed to the ...
What does the amount to be financed mean? ›It means the amount of money you are borrowing from the lender, minus most of the upfront fees the lender is charging you.
What is the amount financed on a car? ›Amount financed .
This is the total amount you are borrowing to purchase the car. It's the dollar amount of the credit being extended to you by the lender. It's typically not the same as the price of the car if you make a down payment.
The amount financed is the loan amount applied for, minus the prepaid charges. The amount financed may be lower than the amount you applied for because it represents a net figure: it's equal to your loan amount minus any prepaid fees.
What is the truth in lending amount financed? ›Terms used in the Truth-in-Lending disclosure
Amount Financed – The amount you're borrowing. Total of Payments – The sum of all the payments that you will have made at the end of your loan term. This includes the projected cost of repaying the principal amount of the loan plus all of the finance or interest charges.
For the purposes of this subparagraph, “itemization of the amount financed” means a disclosure of the following items, to the extent applicable: (i) the amount that is or will be paid directly to the consumer; (ii) the amount that is or will be credited to the consumer's account to discharge obligations owed to the ...
What is the minimum financed amount mean? ›In the world of finance, we often come across the term "minimum amount financed." This refers to the smallest sum of money that can be borrowed under a particular scheme, typically represented as a fixed amount.
What is the difference between amount financed and total sale price? ›Amount Financed – The amount of money you're borrowing. Total of Payments – The sum of all of the payments you'll have made by the end of your loan. Total Sale Price – The total cost of your purchase on credit, taking into consideration your down payment.
Is the purchase price the amount financed? ›The total amount financed includes the purchase price of the car plus any additional fees or taxes. The interest rate is the percentage of the total amount financed that the lender charges for borrowing the money, and the length of the loan is the amount of time you have to repay the loan.
How much is too much for a car payment? ›According to our research, you shouldn't spend more than 10% to 15% of your net monthly income on car payments. Your total vehicle costs, including loan payments and insurance, should total no more than 20%. You can use a car loan calculator to calculate a monthly payment within your budget.
How do you calculate financing amount? ›
- If your rate is 5.5%, divide 0.055 by 12 to calculate your monthly interest rate. ...
- Calculate the repayment term in months. ...
- Calculate the interest over the life of the loan. ...
- Divide the loan amount by the interest over the life of the loan to calculate your monthly payment.
To calculate how much a loan will cost you, you'll need to add up the total interest charges for the life of your loan and combine that amount with any loan fees you paid. If you didn't pay any loan fees like an origination fee, then the total cost of your loan is made up of interest charges.
What is a total finance amount? ›Total Financing Amount means the maximum capitalized cost and/or maximum principal amount of leases and/or financing arrangements, as applicable (including the Master Zipcar Finance Lease), made available or anticipated to be made available to Borrower under the applicable Vehicle lease or financing agreement.
What does "financed amount" mean? ›The amount financed is the principal loan amount minus prepaid finance charges. A prepaid finance charge is a "finance charge" paid by the borrower separately in cash or by check before or at closing of a loan transaction, or withheld from the loan proceeds.
What is the Unfair lending Act? ›The Truth in Lending Act (TILA) protects you against inaccurate and unfair credit billing and credit card practices. It requires lenders to provide you with loan cost information so that you can comparison shop for certain types of loans.
What are the 6 things they must disclose under the truth in the lending Act? ›TILA disclosures include the number of payments, the monthly payment, late fees, whether a borrower can prepay the loan without penalty and other important terms. TILA disclosures is often provided as part of the loan contract, so the borrower may be given the entire contract for review when the TILA is requested.
What does it mean to get financed? ›Financing is the process of providing funds for business activities, making purchases, or investing. Financial institutions, such as banks, are in the business of providing capital to businesses, consumers, and investors to help them achieve their goals.
What is a financed payment? ›Financing Payment means any amount payable by the Recipient to the Bank pursuant to the Legal Agreements or these Standard Conditions, including (but not limited to) any amount of the Withdrawn Financing Balance, the Interest Charge, and any refund of the Withdrawn Financing Amount payable by the Recipient.
What does it mean to be fully financed? ›fully financed means that the offeror has sufficient funds for the offer and related expenses, which shall be evidenced as indicated in the Agreement.