Florida Statutes 520.78 – Finance charge limitation
Current as of: 2023 | Check for updates
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Terms Used In Florida Statutes 520.78
- Contract: A legal written agreement that becomes binding when signed.
- 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
- Lien: A claim against real or personal property in satisfaction of a debt.
- Minimum finance charge: The minimum, or fixed, finance charge that will be imposed during a billing cycle. A minimum finance charge usually applies only when a finance charge is imposed, that is, when you carry over a balance. Source: Federal Reserve
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Statute: A law passed by a legislature.
- Usury: Charging an illegally high interest rate on a loan. Source: OCC
(1) The maximum finance charge included in a home improvement contract payable in substantially equal successive monthly installments beginning 1 month from the date the finance charge accrues shall not exceed $12 per $100 per annum. Such finance charge shall be computed on the principal amount financed on the contract, notwithstanding that the time balance is required to be paid in installments. The finance charge shall not accrue over a longer period than one which commences on the date of substantial completion of the contract and ends on the date when the final installment is payable. For a period less or greater than 12 months or for amounts less or greater than $100, the amount of the maximum finance charge shall be increased or decreased proportionately. A fractional monthly period of 15 days or more may be considered a full month. If the finance charge computed as above provided is less than $25, a minimum finance charge of $25 may be made.
(2) When a contract is payable other than in substantially equal successive monthly installments, as when payable in irregular or unequal installments either in amount or periods or in regular installments followed by or interspersed with an irregular, unequal, or larger installment or installments or if the finance charge accrues from a date more than 1 month before the first installment is payable, the finance charge may not exceed an amount which, having due regard for the schedule of installment payments, will provide the same yield as if the home improvement contract were payable in accordance with the standard payment terms stated in subsection (1).
(3) If amounts for debt consolidation are included in the home improvement contract, the finance charge shall be computed as in subsections (1) and (2), but the charge computed on the principal amount advanced for debt consolidation shall not exceed 10 percent simple interest or the rate for simple interest set in the general usury statute, chapter 687.
(4) The buyer may be charged for, and there may be collected from him or her, reasonable fees and costs actually to be paid for construction authorizations and similar permits issued by public agencies and for title search, title insurance, and services of an attorney relating to any real property mortgage, lien, or other encumbrance taken, granted, or reserved pursuant to the contract.