Texas Finance Code 347.109 – Computation of Finance Charge for Disclosure
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(a) This section applies only for purposes of disclosure.
(b) The finance charge on a credit transaction is computed on the unpaid balance from the effective date of the transaction provided by the credit document until the payment date of the final installment, notwithstanding that the total of payments is required to be repaid in installments.
Terms Used In Texas Finance Code 347.109
- Contract: A legal written agreement that becomes binding when signed.
- Credit document: means a written instrument evidencing a credit transaction and includes all written agreements between each consumer and creditor that relate to that transaction. See Texas Finance Code 347.002
- Credit transaction: means :
(A) any sale, loan, or other transaction involving a retail purchase of a manufactured home and under which a person in a written agreement, including a credit sales contract or loan instrument, grants to another person a purchase money lien on the manufactured home to secure an extension of credit that is:
(i) subject to a finance charge; or
(ii) payable in more than four installments, not including a down payment; and
(B) a lease or bailment described by § 347. See Texas Finance Code 347.002 - Finance charge: The total cost of credit a customer must pay on a consumer loan, including interest. The Truth in Lending Act requires disclosure of the finance charge. Source: OCC
(c) The finance charge on a credit transaction that includes an adjustable rate provision is computed on the amount financed using the initial contract rate.