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Estimating Practices

Labeling of estimates

Estimates must be designated as such in the segregated disclosures.  Even though other disclosures are based on the same assumption on which a specific estimated disclosure was based, the creditor has some flexibility in labelling the estimates.  Generally, only the particular disclosure for which the exact information is unknown is labelled as an estimate.  However, when several disclosures are affected because of the unknown information, the creditor has the option of labelling either every effective disclosure or only the disclosure primarily affected.  For example, when the finance charge is unknown because the date of consummation is unknown, the creditor must label the finance charge as an estimate and may also label as estimates the total of payments and the payment schedule.  When many disclosures are estimates, the creditor may use a general statement, such as "all numerical disclosures except the late payment disclosure are estimates," as a method to label those disclosures as estimates.

Use of estimates in variable-rate transactions

The variable-rate feature does not, by itself, make the disclosures estimates.

Per diem interest

If the amount of per-diem interest used in preparing the disclosures for consummation is based on the information known to the creditor at the time the disclosure document is prepared,  the disclosures are considered accurate under this rule, and affected disclosures are also considered accurate, even if the disclosures are not labeled as estimates.

Last revised: July 29, 2013

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