I've been always told that the first payment has to be within 45 days. Is this true and if so could you tell me where this is located?

We have a customer that wants to make payments in November 1 & March 1 to correspond with his rent payments.

I think that is a state law issue, or maybe your bank's loan policy.....don't know of any rule from a federal standpoint.

Thanks, I will look at the state law then

We discuss this topic regularly. In most cases (very likely including yours) the simplistic answer "there's no limit on the length of a first payment period" will apply. The problem is...you have to look at all the possible authorities controlling the answer. Here are a few possibilities--most likely there are others.

- Regulation Z imposes no limit for APR calculations.
- State laws have, at times, limited the length of first payment periods. Most likely, if your state had one it was repealed when add-on/Rule of 78 lending became illegal or went out of style. Discuss with the bank's legal counsel.
- Investors, insurers, and other third party stakeholders may very well set limits on the extent of payment schedule irregularities they will tolerate. Review seller/servicer manuals and other directives from third parties that may have a "golden rule" on this topic.
- Internal credit policies, operational and servicing limitations, and accounting standards may dictate maximum allowable payment period irregularities. Consult with appropriate bank officers.