Finance charges, in general, is the fee charged by lenders on extension of credit. It could be a fixed amount or a percentage of the credit obtained. Finance charges allow the creditors to make a profit on the use of their money. The finance charges may vary depending on the type of financing. 

Processing fees, interest payments, late payment fees, stamp duty fee, GST, cancellation fee, loan transfer fee, etc., are the finance charges involved in a credit. Every country sets certain limits to fixing the finance charges. The financial institutions cannot charge more than the stipulated fee. 

There is no way to obtain a credit without going through the finance charges. Even the enticing products, such as ‘No Cost EMI’ and ‘Zero Interest Loans’  will carry hefty processing fees. Although you can avoid certain finance charges such as late payment fee, interest on credit cards for carrying balance, etc., certain types of charges are pre determined which have to be paid to avail the credit.