What information must borrowers be provided with according to the Truth-in-Lending Act?

What information must borrowers be provided with according to the Truth-in-Lending Act?

• A. Details about repayment schedules
• B. Information on the cost of the loan
• C. A breakdown of interest rates by month
• D. Statements on credit score requirements

Answer: (B)

The Truth-in-Lending Act (TILA) requires that borrowers be informed about the cost of the loan in a clear and conspicuous manner. This includes information such as the annual percentage rate (APR), finance charges, and the total amount financed, which collectively give borrowers a comprehensive understanding of the expenses associated with the loan. This transparency is essential to help consumers make informed decisions about borrowing money, as it allows them to compare different loan offers effectively. Understanding the cost of the loan empowers borrowers to choose options that align with their financial situations and goals. While details about repayment schedules, interest rates, or credit score requirements can also be important for consumers, TILA specifically emphasizes the need for clarity on the overall cost of borrowing, which is why this aspect is essential in the information provided to borrowers.

The Truth-in-Lending Act (TILA) requires that borrowers be informed about the cost of the loan in a clear and conspicuous manner. This includes information such as the annual percentage rate (APR), finance charges, and the total amount financed, which collectively give borrowers a comprehensive understanding of the expenses associated with the loan. This transparency is essential to help consumers make informed decisions about borrowing money, as it allows them to compare different loan offers effectively. Understanding the cost of the loan empowers borrowers to choose options that align with their financial situations and goals.

While details about repayment schedules, interest rates, or credit score requirements can also be important for consumers, TILA specifically emphasizes the need for clarity on the overall cost of borrowing, which is why this aspect is essential in the information provided to borrowers.