A more thorough explanation:

Costs of collection refer to the expenses incurred in the process of receiving payment for a note. This includes any fees or charges associated with the effort to collect the outstanding debt.

• Attorney's fees: If a borrower fails to make payments on a loan, the lender may hire an attorney to help collect the debt. The fees charged by the attorney would be considered costs of collection.
• Collection agency fees: A lender may also hire a collection agency to help recover the outstanding debt. The fees charged by the agency would be considered costs of collection.
• Postage and mailing costs: If a lender sends letters or notices to a borrower regarding the outstanding debt, the postage and mailing costs would be considered costs of collection.

These examples illustrate how costs of collection can add up quickly and become a significant expense for lenders. It is important for borrowers to make timely payments to avoid incurring these additional costs.