Financing a premium costs more than paying in full — you are paying for the use of money. The good news is that in Texas, every cost has to be spelled out on your agreement before you sign.
The costs you may see
- Finance charge — the cost of the loan itself, shown as a dollar amount on your agreement.
- Late charge — applies only if a payment arrives after its due date and grace period. Pay on time and you never see it.
Texas law limits what a premium finance company may charge, and charging amounts the law does not allow is prohibited.
How to compare offers
- Compare the total of payments and the finance charge, not just the monthly payment. A longer term lowers the monthly payment but usually raises the total.
- Check the down payment — a bigger down payment lowers the total finance charge.
- Ask how payments can be made and when they are considered late.
Paying off early saves money
If you pay your account off before the last payment, you receive a refund of the unearned finance charge. Texas law entitles you to this refund. NatPrem calculates it using the Rule of 78s, which assigns more of the finance charge to the early months of the loan, so the earlier you pay off, the larger the refund. Call us for an exact payoff figure on any date.
If your policy is cancelled
When a financed policy is cancelled, the insurance company returns the unearned premium to the finance company, which applies it to your balance. If that leaves money over, the surplus is refunded to you. If it does not cover the balance, you owe the difference. (See what happens if you miss a payment.)
Talk to us
Ask your insurance agent to finance your premium with National Premium Finance Company, or get an estimate first. Questions? Call (214) 586-3155 or contact us. Hablamos español.