If a loan balance is $250,000 with an annual servicing fee of 0.35%, what is the monthly fee for servicing?

To find the monthly servicing fee for a loan balance of $250,000 with an annual servicing fee of 0.35%, you first calculate the annual fee.

Multiply the loan amount by the annual servicing fee rate:

$250,000 x 0.0035 (0.35% expressed as a decimal) = $875.

This amount represents the total annual servicing fee. To find the monthly servicing fee, divide the annual fee by 12 months:

$875 ÷ 12 = approximately $72.92.

Thus, the monthly fee for servicing the loan is correctly calculated as $72.92. This understanding of converting annual rates to a monthly context, by first calculating the annual fee and then dividing by the number of months, is crucial when determining recurring charges associated with a loan.