Under the Truth in Lending Act (TILA), lenders are required to disclose which of the following to borrowers so they can compare the true cost of credit?
Correct Answer
B) The Annual Percentage Rate (APR) of the loan
TILA (Truth in Lending Act) requires lenders to disclose the Annual Percentage Rate (APR) and other key loan terms so borrowers can compare the true cost of credit across different loan products. The APR includes the interest rate plus certain fees, giving a more complete picture of the loan's cost than the interest rate alone.
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Related Topics & Key Terms
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Key Terms:
Related Concepts
RESPA is a federal law that requires lenders to provide borrowers with information about settlement costs, prohibits kickbacks and referral fees, and limits escrow account deposits. It applies to federally related mortgage loans.
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
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