What does the Truth in Lending Act require lenders to do?

The Truth in Lending Act (TILA) primarily aims to ensure that borrowers receive clear and accurate information regarding the costs associated with credit. This includes disclosing the annual percentage rate (APR), finance charges, and other terms of credit, allowing consumers to make informed decisions about borrowing.

By requiring lenders to inform borrowers of all costs associated with credit, the act promotes transparency and helps prevent misleading practices. This disclosure enables consumers to compare different credit offers effectively, fostering a more competitive lending environment and empowering them to choose the best financial options available.

While options related to credit rewards, flexible repayment options, and insurance might be relevant in certain contexts, they are not central to the requirements set forth by the Truth in Lending Act. The act specifically focuses on the transparency of costs to ensure that consumers fully understand the financial implications of borrowing.