Question: You wrote in the past that if one takes a mortgage from the bank on behalf of his son he cannot recover the interest he paid the bank unless he makes a heter isska with his son, even though the father incurred this expense in order to be able to lend the money to his son. Does that mean that one who lends money generally needs to make a heter isska in order to recover from the borrower the expenses he incurred in order to extend the loan?
Answer: No, it depends on what type of expense is incurred.The Gemara (Bava Basra 167 B) rules that the expenses incurred in preparing a loan document are borne exclusively by the borrower because it is he who benefits from the loan. Thus we see that the borrower can be charged for the expenses which are necessary in order to extend the loan. Thus, if a lawyer is hired to prepare loan documents it is proper to make the borrower pay the lawyer’s fees. Similarly, if a large amount is involved and the lender wants to place a lien on the borrower’s property the borrower can be required to pay all the fees that are involved in placing this lien. Even though the direct cause of the fees is the lender’s insistence that the loan must be secure, nonetheless, it is the borrower who must pay. This is comparable to the expense involved in preparing the loan document since both are requirements of the lender in order to increase the security of his principle.
Another expense that the borrower can be required to pay is the cost of wiring the money into the borrower’s account. The poskim go even further and rule that the borrower may collect the money that is owed to the lender by a third-party in order to make these funds available for him to borrow, if there are no unusual difficulties involved. (See Toras Haribbis 5, 9)
Another example is that of a gemach-a free-loan society. If due to the many loans involved it needs to hire staff it can pass these expenses on to the borrowers.
An interesting example involves a CD. If the lender needs to ask for the funds earlier than the due date in order to make the funds available for the loan the lender can make the borrower pay for any penalties that are incurred-if he initially informed the borrower that he will incur these expenses. However, one canot ask the borrower to pay for the loss in interest that the lender was going to earn on the CD since this is not an expense but a loss of potential income.
that the lenders