Federal Truth in Lending Disclosures

     Regulation Z of the Federal Truth in Lending law requires that the provider of consumer financing make certain informational disclosures.  This information is not designed to be the final Reg. Z disclosure, but is provided for informational purposes only.

    The final disclosure you receive as part of the loan package will contain a chart as shown above.  For purposes of clarity the definitions of the terms used above are as follows:

    A. The Annual Percentage Rate, APR, is the cost of your credit expressed as an annual rate. Because you may be paying loan discount points and other prepaid finance charges at closing, the APR disclosed is often higher than the interest rate (1%) on your loan. This APR can be compared to the APR on other loan programs to give you an consistent means of comparing rates and programs.

    B. The Finance Charge is the cost of credit expressed in dollars. It is the total amount of interest calculated at the interest rate over the life of the loan, plus Prepaid Finance Charges and the total amount of any required mortgage insurance charges over the life of the loan.

    C.  The Amount Financed is the loan amount applied for, minus the Prepaid Finance Charges. Prepaid Finance Charges include items paid at or before settlement, such as loan origination, commitment or discount fees (points), adjusted interest, and initial mortgage insurance premium. The Amount Financed is lower than the amount you applied for because it represents, a NET figure.  Gnam Educational Trust Loans Reg. Z calculations contain only the $30.00 application fee as such additional charges.  There are no loan origination fees, commitment, other such charges.

    D.    The Total Amount of Payments figure represents the total amount you will have paid if you make the minimum required payments for the entire term of the loan. This includes principal, and interest, but does not include payments for late fees, collection fees, or other such charges charged in the event of a default.  This figure is computed by multiplying the amount of the monthly indicated in box F - Monthly Amount of Payments times the in number of months indicated in box E - Term of Repayment, plus the amount of the loan application fee ($30.00) paid.

    E.   The Term of Repayment figure represents the number of months in which you will have to repay the loan.  This figure does not include the period of time, while you are completing your education, that no payments are due to the Gnam Educational Trust, or the three (3) months after you complete your course of study.  This number is the lessor of 120 (10 years) or that number arrived at by dividing the total prinicpal amount of loans from the Trust received by you by 150.  For example, if you received loans in the total principal amount of $3,000.00 the term of repayment would be 20 months (3,000/150=20).   If you received loans totaling $20,000.00 your term of repayment would be 120 months (20,000.00/150=133.33) since the sumber of months arrived at by utilizing the formula exceeds 120.

    E.  The Monthly Amount of Payments figure represents the amount of each monthly installment expected to be apid to the Gnam Education Trust by you.  These payments are calculated by adding together the principal sum of the loan received by you, plus an reasonable estimate of the interest that will accrue during your estimated educational period and the three (3) months thereafter, and dermining the even amortization payment for such amount, over the Term of Repayment, together with the interest that would accrue during the Term of Repayment.

    For example, in 2000, during your freshman year you receive a loan from the Trust of $3,000, and you anticpate graduating in May, 2004, and commenced payments immediately thereafter, the calculation of payments would be as follows, presuming no loans are made in subsquent years.

            Principal                                         $3,000.00
            Accrued Interest (4 years at 1%)        120.00
            Repayment Balance                        $3,120.00
           

            Term of Repayment ($3,000/150)            20 months

          Monthly Payment ($3,120.00 over 20 months at 1% interest) = $157.37 per month for 20 months.

    If you received a loan of $3,000.00 for each of the 4 years of college, the calculation would be as follows:

            1st Year Loan Principal                  $3,000.00
            Accrued Interest (4 years at 1%)        120.00
            Repayment Balance                        $3,120.00

            2nd Year Loan Principal                 $3,000.00
            Accrued Interest (3 years at 1%)          90.00
            Repayment Balance                        $3,090.00

            3rd Year Loan Principal                 $3,000.00
            Accrued Interest (2 years at 1%)          60.00
            Repayment Balance                        $3,060.00

            4nd Year Loan Principal                 $3,000.00
            Accrued Interest (1 years at 1%)          30.00
            Repayment Balance                        $3,030.00

          Total Repayment Balance $12,300.00

          Term of Repayment ($12,300/150) =  82 months

          Monthly Payment ($12,300.00 over 82 months at 1% interest) = $155.25 per month for 82 months.