The Truth in Lending Act (TILA) requires lenders to disclose which of the following to borrowers?
Correct Answer
B) The annual percentage rate (APR)
TILA (Truth in Lending Act) requires lenders to disclose the Annual Percentage Rate (APR), which reflects the true cost of borrowing including interest and fees, so consumers can compare loan offers on an equal basis.
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Related Topics & Key Terms
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Related Concepts
Usury is the practice of charging an interest rate that exceeds the maximum rate permitted by state law. Usury laws protect borrowers from excessive interest charges on loans.
A VA loan is a mortgage guaranteed by the Department of Veterans Affairs available to eligible veterans, active-duty service members, and surviving spouses. It offers no down payment and no private mortgage insurance requirements.
An adjustable-rate mortgage (ARM) has an interest rate that changes periodically based on market conditions, typically after an initial fixed-rate period. The rate adjustment is tied to a financial index plus a margin.
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