Finance Charge is any fee representing the cost of credit, or the cost of borrowing.
It is interest accrued on, and fees charged for, some forms of credit. It includes not only interest but other charges as well, such as financial transaction fees.
Finance Charge includes the total of all the interest a borrower pay over the entire life of the loan (assuming the borrower keeps the loan to term), plus all prepaid loan charges.
If borrower prepays any principal during the loan, the total finance charge is reduced.
Prepaid loan charges include origination fees, discount points, mortgage insurance and other applicable charges.