The Truth in Lending Act (TILA) is a federal law that requires financial institutions to disclose specific information about the terms and cost of credit, including the finance charge and the annual percentage rate (APR).
TILA obligates a lender to give full written disclosure of all fees, terms, and conditions associated with the loan initial period and then adjusts to another rate that lasts for the term of the loan.
The Truth in Lending Act requires lenders to provide standardized information so that borrowers can compare loan terms. In general, lenders must provide information on what credit will cost the borrowers, when charges will be imposed, and what the borrower’s rights are as a consumer. What credit will cost the borrowers, when charges will be imposed, and what the borrower’s rights are as a consumer.