Under the Truth in Lending Act (TILA), lenders are required to disclose which of the following to borrowers?
Correct Answer
B) The Annual Percentage Rate (APR) reflecting the true cost of the loan
TILA (Truth in Lending Act) is a federal law that requires lenders to disclose the Annual Percentage Rate (APR) and other key loan terms to borrowers before consummation of the loan. The APR reflects the true cost of borrowing by including the interest rate plus fees and other charges, expressed as a yearly rate. This allows borrowers to make informed decisions and compare loan offers on an equal basis. TILA disclosures are now delivered through the Loan Estimate and Closing Disclosure forms under the TRID rule.
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