Understanding Rates and Fees
Learn how interest charges, Annual Percentage Rates (APRs), origination fees, and repayment schedules work across online lending products.
Bear Loan Company is not a direct lender and does not establish, quote, or guarantee interest rates, APRs, or fee schedules. All rates and fees are established solely by independent participating lenders in compliance with state statutory maximums and individual underwriting guidelines.
1. What Is Annual Percentage Rate (APR)?
The Annual Percentage Rate (APR) represents the total yearly cost of borrowing money, expressed as a percentage. Unlike a simple interest rate, the APR accounts for both periodic interest charges and any mandatory upfront finance or origination fees.
Under the federal Truth in Lending Act (TILA), every lender must provide you with a written disclosure of the APR and total dollar cost of credit before you sign a binding contract.
2. Components of Total Borrowing Cost
Interest Charges
The fee charged by the lender for the use of borrowed capital over time, typically accruing daily or monthly on unpaid principal balances.
Origination Fees
An administrative processing charge that some lenders deduct from the funded loan amount prior to deposit.
Late Payment Fees
A penalty fee assessed if an installment or payday payment is not received by the contractual due date or grace period expiration.
NSF / Returned Payment Fees
Fees charged by both your bank and the lender if an electronic ACH transfer fails due to non-sufficient funds.
3. Payday vs. Installment Cost Structures
| Loan Type | Typical Cost Structure | Repayment Dynamics |
|---|---|---|
| Payday Loans | Flat fee per $100 (e.g. $15–$30/$100) | Due in full on next payday (high equivalent APR due to short duration) |
| Installment Loans | Stated APR (e.g. 15% – 35.99%+) | Amortized over 3–24 months; interest accumulates over time |
4. How to Read Your TILA Box
When presented with a formal loan agreement from an independent lender, look for the standardized federal disclosure box displaying four essential numbers:
- Annual Percentage Rate (APR): The cost of credit as a yearly rate.
- Finance Charge: The total dollar amount the credit will cost you.
- Amount Financed: The amount of credit provided to you or on your behalf.
- Total of Payments: The full dollar amount you will have paid after all scheduled payments are completed.