Credit

Interest can be computed in a number of ways, and creditors generally attempt to use the most profitable way that is within legal limits. In figuring the legal rate of interest, it is essential to determine which expenses are a part of the finance or interest charges. Not customarily considered components of finance charges are fees for filing or recording a document, for payment of an individual who does an appraisal, and for the expense of preparing documents; closing costs; and prepayment penalties.