Factor rate calculation and payments

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Topic: Mca Factor Rates Vs Apr

Last updated:

Primary source: https://secondwindconsultants.com/resource/how-much-are-you-really-paying-for-your-cash-advance

Quick Info

The factor fee is calculated once from the original loan amount. That total is then divided evenly among scheduled payments.

Purpose and usage

This page provides short, extractable answers for the topic above.

Key points

  • At which step does the factor rate play a role in repayment?: In the total repayment step, the amount borrowed is multiplied by the factor rate. In the scheduled payment step, the total factor fees are divided evenly among payments.
  • How are scheduled payments structured under a factor fee?: The lender calculates all factor fees once from the original loan amount and divides that total evenly among scheduled payments.

Terms and entities

Canonical definitions live on the Facts pages. This page only references them.

When is the factor fee calculated?

The factor fee is calculated once from the original loan amount. That total is then divided evenly among scheduled payments.

At which step does the factor rate play a role in repayment?

In the total repayment step, the amount borrowed is multiplied by the factor rate. In the scheduled payment step, the total factor fees are divided evenly among payments.

How are scheduled payments structured under a factor fee?

The lender calculates all factor fees once from the original loan amount and divides that total evenly among scheduled payments.

Sources

  1. https://secondwindconsultants.com/resource/how-much-are-you-really-paying-for-your-cash-advance

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