What does PFC stand for in lending terminology?

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Multiple Choice

What does PFC stand for in lending terminology?

Explanation:
PFC stands for Prepaid Finance Charge. This refers to the portion of the finance charges that you pay before the loan closes, such as prepaid interest, points paid to obtain a lower rate, and other fees charged upfront. Under Truth in Lending, these up-front charges are included in the finance charge used to determine the APR, so they affect the overall cost of credit. The other terms listed aren’t standard lending terminology—“Prepaid Fixed Cost” and “Prepaid Finance Cost” aren’t used, and “Primary Finance Charge” isn’t the label for these up-front items.

PFC stands for Prepaid Finance Charge. This refers to the portion of the finance charges that you pay before the loan closes, such as prepaid interest, points paid to obtain a lower rate, and other fees charged upfront. Under Truth in Lending, these up-front charges are included in the finance charge used to determine the APR, so they affect the overall cost of credit. The other terms listed aren’t standard lending terminology—“Prepaid Fixed Cost” and “Prepaid Finance Cost” aren’t used, and “Primary Finance Charge” isn’t the label for these up-front items.

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