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

The Truth in Lending Act (TILA) mandates that lenders disclose important information regarding the costs associated with credit. This includes providing clear and comprehensible details about the terms of the loan, such as the annual percentage rate (APR), finance charges, the total amount financed, and the total payments by the consumer.

This requirement is designed to promote transparency and help consumers make informed decisions regarding borrowing. By ensuring that borrowers are fully aware of the costs associated with a loan, TILA aims to prevent deceptive lending practices and foster healthier consumer-lender relationships. The act emphasizes informed consent and clarity in the lending process, equipping consumers with the knowledge they need to compare loan offers effectively.

The other options do not align with TILA's core purpose. Offering loans to all applicants without conditions may not be feasible or responsible for lenders, guaranteeing fixed interest rates is not required by TILA, and providing property valuations for free is also not a requirement under this act. Instead, the focus of TILA is strictly on transparent disclosure of credit costs.