Question: I am confused regarding APR and interest on BHPH loans, especially with added fees like insurance. What exactly is included in my payments, and can terms be renegotiated?
BHPH loans bundle everything into your monthly payment: the base interest, fees, insurance charges, and sometimes even service fees all play a part in the APR. The APR isn’t just the interest rate; it’s how the lender spreads out all extra costs over time, which can make the effective rate much higher than you might expect. Some fees can be discussed, but terms are often set in stone, so you have to be deviceful. Review the contract closely and, if you have any other financing options, compare them to see if you can push back on any unnecessary or inflated charges.