Hi,
An unsecured consumer loan, if we charge admin fee of $50, can we finance the admin. fee? i.e. if the loan amount is $2,000, admin. fee $50, can we do "amount financed = $2050"?
Any feedback would be appreciated!

Thank you very much!!

I am not quite sue what you are asking? Amount financed - as in Regulation Z amount financed??

Hi Randy,
Thank you for reading and replying my post!

I want to ask:
1. can we add $50 admin fee to our loan amount, so our loan amount is $2050. (avoid out of pocket fee)
2. we plan to do loans under TX code 342 subchapter E. When I do research online, I read a letter on IBAT's website regarding "financing administrative fees". This confuses me.

https://www.ibat.org/pdfs/1999/10/20/late-charges-fees-interpretive-letter

Thank you very much for your time!

Yes, you can finance the administrative fee, what you cannot do is put it in your principal bucket. You can collect in the first payment or amortize it over the life of the loan, but you cannot charge interest on it. So you would have to put it out into a separate bucket on your LOS on which interest does not accrue.

Thank you for your input, always informative and precise!

Another related question: I understand admin. fee is a finance charge. We will include APR calculation. On TIL, are we required to list/itemize this $50 admin. fee?

Many thanks again!

If you are providing an itemization of amount financed under 1026.18(c) - yes.