Frequently Asked Questions

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1. How are finance charges calculated?

All retail installment contracts with BAAC are "simple interest" contracts.  This means that finance charges, often referred to as "interest" accrue daily, beginning on the date of your contract.  Each time you make a payment, the payment amount is applied first to accrued finance charges.  The amount of finance charge that accrues is calculated by multiplying the number of days between the last payment and the next payment by your individual daily per diem.  The per diem is the amount of finance charge incurred "per day." The formula is as follows: Current principal balance multiplied by your finance charge rate and divided by 365 (number of days in a year)

Finance charge example:
If your account has a current principal balance of $10,000.00 and a finance charge rate of 10%, your daily per diem is approximately $2.74, calculated from ($10,000.00) x (.10) / 365. This means that $2.74 in finance charges accrue each day.  Typically, payments are due Bi-weekly or every 14 days. So 14 days of finance charges accrue during that time.  Therefore, $38.36 of a payment would be applied first to these accrued finance charges and the remainder to other amounts owed, including principal. If the payment in this example was $220.00, $38.36 would be applied to finance charges, and the remaining $181.64 would be applied to the principal balance.

2. How is my payment divided between principal and finance charges?

Payments are applied in accordance with any applicable law.  Absent any applicable law, payments are applied first toward finance charges and to other amounts owed, including any late charges, principal, or other fees.  When the principal balance is reduced with a payment, the daily per diem will also decrease.  Therefore, the amount of finance charges that accrue daily will decrease each time a payment is made, as long as the principal balance is reduced with each payment.  This is why the amount of finance charge paid at the beginning of a contract is higher than the amount paid at the end of a contract.

3. What is my grace period?

A grace period is the time after the payment is due and before a late charge is assessed. Grace periods vary based on applicable law.  Our standard Retail Installment Contract explicitly states "If all or a portion of a payment is not paid within 10 days of its due date, you will be charged a late charge of 5% of the unpaid amount of the payment due". Despite any grace period, your monthly payment is due by the contractual due date. If mailing your payment, we recommend that you get it in the mail 7-10 days in advance to allow for timely receipt.

4. Can I have my payment automatically deducted from a checking or savings account?

Our E-Z Pay Program allows you to set up recurring payments to be deducted from your checking or savings account, using a credit or debit card. Unfortunately, we can not set this up using your account information. You will need an active debit or credit card.

5. If I pay more than my payment due, how will the additional amount be applied to my account?

If you pay more than your payment amount, we will automatically apply the additional amount to any fees owed and then to future payments, up to the next 3 payments. We will apply any amounts remaining after that to reduce the principal balance owed on your account. If you would like additional amounts applied to your principal balance you must specify this at that time.

6. Can I refinance my contract with BAAC to reduce my payments and/or interest rate?

BAAC does not offer refinancing at this time.  Should you pursue refinancing with another financial institution, there is no penalty for paying off your account early.

7. The last coupon in my book does not have a payment amount. Do I send in the regular payment amount?

The last coupon in your book does not have a payment amount because that amount may vary depending on your payment history. As you approach your final payment, please contact your Account Manager for the amount required to pay off your account in full with your last payment.

8. Why is my final payment larger than my regular monthly payment amount?

The amount of your final scheduled payment will vary depending on your payment history.  The final payment amount assumes you make your remaining payments on the scheduled due date.  The final payment amount includes any amount past due, plus any other unpaid fees that may have been previously assessed to your account.  This amount is also impacted by your payment history. Your account is based on a "simple interest" retail installment contract.  This means that finance charges, or "interest," accrue on your account each day based on the unpaid principal balance. If you regularly made payments before your due date, fewer finance charges would have accrued during the term of your account.  If you regularly made payments after your due date, more finance charges would have accrued and the final scheduled payment is likely larger than the regularly scheduled amount.