The formula to calculate the Loan Fee (LF) is:
\[ \text{LF} = P \times r \]
Where:
A loan fee is a charge that a lender imposes on a borrower for the processing, underwriting, preparation, and establishment of a new loan. This fee is typically a percentage of the loan amount and is often referred to as points in the lending industry. The loan fee is usually paid upfront but can sometimes be rolled into the total loan amount.
Let's assume the following values:
Using the formula to calculate the Loan Fee:
\[ \text{LF} = 100,000 \times 0.02 = 2,000 \]
The Loan Fee is $2,000.
