True or False: The finance charge reflects the total cost of the loan.

The statement is true because the finance charge indeed represents the total cost of credit to the borrower, expressed as a dollar amount. This total cost includes not just the interest charged on the loan but also any fees associated with obtaining the credit. It provides a comprehensive view of what the borrower will actually pay over the life of the loan, ensuring transparency and aiding in comparison between different financing options.

In the context of Truth in Lending (Regulation Z), the finance charge serves to inform consumers about all costs associated with borrowing, allowing them to make informed financial decisions. Therefore, understanding the finance charge is crucial for consumers when evaluating loan products, as it encompasses the full financial commitment required for the loan.