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Financing Practice Question

Under the Truth in Lending Act (TILA), which disclosure is required to help borrowers compare loans?
A
Loan-to-value ratio
B
Annual Percentage Rate (APR)
C
Debt-to-income ratio
D
Property tax rate
Explanation

TILA requires lenders to disclose the Annual Percentage Rate (APR), which includes the interest rate plus other costs of the loan expressed as a yearly rate. This allows borrowers to compare the true cost of different loan products.

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