What term refers to the costs associated with borrowing, typically expressed as a fee?

The term that refers to the costs associated with borrowing, typically expressed as a fee, is known as a finance charge. This encompasses all fees that a borrower is required to pay to access credit, which can include interest and any additional charges that may apply, such as loan origination fees.

Finance charges are a critical aspect of understanding borrowing costs, as they help consumers gauge the total expense of a loan over time. They reflect the price of borrowing money and can significantly impact the overall cost of a loan, making it essential for borrowers to be aware of these charges before taking out a loan.

Principal represents the amount of money borrowed, and while interest rate refers to the percentage applied to that principal to calculate interest, neither encapsulates the entirety of costs that can accrue with a loan. Service charge is more specific and usually pertains to a charge for a specific service provided by the lender, rather than the overall borrowing cost. Thus, "finance charge" provides the most comprehensive view of costs associated with borrowing.