Truth in Lending Act disclosure items include which of the following?

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Multiple Choice

Truth in Lending Act disclosure items include which of the following?

Truth in Lending Act disclosures are meant to show the borrower the true cost of credit in a consistent, comparable way. The items that must be disclosed include the amount financed, the finance charge, and the annual percentage rate. Amount financed is the actual cash the borrower receives from the lender, after subtracting prepaid charges that are financed. This figure helps you understand how much credit you’re really getting. Finance charge is the total cost of obtaining credit, including interest and certain fees and points paid to obtain the loan. It represents the dollar amount you’ll pay beyond the amount borrowed. APR, or annual percentage rate, expresses the cost of credit as a yearly rate, combining the finance charge with the amount financed to show the true annual cost of the loan. Because all three items must be disclosed, the correct choice is that all of the above.

Truth in Lending Act disclosures are meant to show the borrower the true cost of credit in a consistent, comparable way. The items that must be disclosed include the amount financed, the finance charge, and the annual percentage rate.

Amount financed is the actual cash the borrower receives from the lender, after subtracting prepaid charges that are financed. This figure helps you understand how much credit you’re really getting.

Finance charge is the total cost of obtaining credit, including interest and certain fees and points paid to obtain the loan. It represents the dollar amount you’ll pay beyond the amount borrowed.

APR, or annual percentage rate, expresses the cost of credit as a yearly rate, combining the finance charge with the amount financed to show the true annual cost of the loan.

Because all three items must be disclosed, the correct choice is that all of the above.

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