Which law demands that the APR be displayed prominently when advertising an interest rate?

Which law demands that the APR be displayed prominently when advertising an interest rate?

• A. Real Estate Settlement Procedures Act
• B. Truth-In-Lending Act
• C. Equal Credit Opportunity Act
• D. Home Mortgage Disclosure Act

Answer: (B)

The Truth-In-Lending Act (TILA) is the law that requires lenders to disclose the Annual Percentage Rate (APR) prominently when advertising an interest rate. This requirement is essential for promoting transparency and helping consumers make informed decisions when comparing loan offers. By displaying the APR clearly, consumers can understand the total cost of borrowing, including interest and any associated fees, allowing for a more accurate comparison between different loan products. TILA aims to protect consumers from misleading lending practices and ensures that they have access to key information before entering into a mortgage agreement. The requirement to display the APR prominently reduces confusion about the true cost of loans, fostering a clearer understanding of the financial commitment involved. Through this regulation, the act ultimately aids in creating a more equitable lending environment.

The Truth-In-Lending Act (TILA) is the law that requires lenders to disclose the Annual Percentage Rate (APR) prominently when advertising an interest rate. This requirement is essential for promoting transparency and helping consumers make informed decisions when comparing loan offers. By displaying the APR clearly, consumers can understand the total cost of borrowing, including interest and any associated fees, allowing for a more accurate comparison between different loan products.

TILA aims to protect consumers from misleading lending practices and ensures that they have access to key information before entering into a mortgage agreement. The requirement to display the APR prominently reduces confusion about the true cost of loans, fostering a clearer understanding of the financial commitment involved. Through this regulation, the act ultimately aids in creating a more equitable lending environment.