What is the Truth in Lending Act?

The Truth in Lending Act is a federal law in Washington that protects consumers when they use credit. Under the Act, lenders must provide important information about the terms of credit, including interest rates. This way, consumers can make informed decisions about the loans they make. The Act requires lenders to disclose the annual percentage rate (APR), the total loan amount, total finance charges, and the total number of payments required. It also mandates that lenders give a written disclosure statement to the borrower before any transaction is finalized. This statement must include information about the amount of the loan, its interest rate, the length of the loan, and the amount of any fees associated with it. The Act also prevents lenders from using deceptive practices. This includes stating false information about the terms of the loan, hiding important information, or misstating the terms of the loan. The Truth in Lending Act is an important law that helps protect consumers from being taken advantage of when taking out a loan. It ensures that lenders provide a fair and accurate account of the costs associated with the loan. By understanding the full scope of their credit obligations, consumers are able to make better financial decisions.

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What is the Truth in Lending Act?

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