Consumer Credit Regulation: 4.7 Non-Cash Compensation and Side Agreements
Lenders may exact non-cash bonuses in consideration for the extension of credit, and these may constitute hidden interest in the same manner as cash payments.193 For example, a lender’s requirement that the borrower assume a third party’s debt to the lender constitutes interest on the loan to the borrower.194 A provision giving the lender a share of the rents from the mortgaged property may be interest.195