Is a line fee interest?
A line fee is a specific fee a borrower pays for a bank to keep credit available for use. This type of revolving credit is convenient as there is no term or end date. Instead, you can keep your line of credit alive and well as long as you are repaying the amount due each month or fortnight. But, what about the line fee? Is this fee included with interest?
Usually, a line fee does not add interest or tax. Instead, it is a line of credit, like a credit card, that has a fee of about a quarter of the limit (0.25%).
The credit line fee is easy to pay because you don’t have to worry about it! Instead, the amount is charged directly to your line of credit when the date comes. You only pay this once, at the beginning of your credit. However, the recurring repayments depend on what is on your agreement and what kind of line of credit you signed for during the application and acceptance.
Mortgage House experts are lenders with many years of experience. They know how confusing lines of credits can be and the fees associated with them. Call them soon for more information!
Line Fee Interest Conclusion
A line fee is interest and sales tax-free. Since this is a type of financial fee, it is exempt from sales tax and only includes the line of credit or borrowed amount, not what is used for interest.