What is a Total Cost Of Borrowing?

A disclosure showing the amount paid for credit, including interest and certain fees.

For example, a lender provides a disclosure showing that a $100,000 loan at 9% over 5 years has a total cost of borrowing of approximately $24,100 in interest plus $2,500 in fees — bringing the true cost of the financing to $26,600 above the principal borrowed.

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