Truth in Lending Act (TILA)

What is the Truth in Lending Act?

When we use our credit cards, get a mortgage on our houses, or do any credit-based transaction where borrowing money is concerned, we are making a contract with a lending institution.

The Truth in Lending Act (TILA) protects borrowers by requiring the lender to fully disclose the terms of the credit.

The lender must disclose the amount or percentage required to satisfy the loan, and must also be transparent concerning time limits, penalties and ownership of the loan.

How am I protected by the TILA?

Understanding your options and terms when taking out a loan is important. There is often lots of fine print that borrowers may miss or not understand. Sometimes the terms of a loan may not be very clear.

Make sure to take time and review all of the disclosure material that comes along with your credit card, loan information or whatever borrowing transaction you are engaging in. There should be no surprises.

The TILA (Truth in lending act) allows you, the consumer, to file suit against a lender if you run into a situation where they claim a “rule” that they had not disclosed to you.

No undisclosed charges or payment terms

The Truth in Lending Act makes sure that the lenders cannot add in any extra charges, rates, penalties, stipulations or rules unless they have first disclosed them to the consumer or borrower.

Another benefit of this law is that it allows the lenders, creditors, banks and financial lenders to be competitive. As long as they are required to be transparent about their requirements, there is more room to vary the components of the loan.

What Should I be Aware of When Taking Out a Loan?

You should understand the basic terms that you are agreeing to, you need to be fully aware of the full cost to your credit.

Make sure you understand each aspect of your loan as it relates to these terms:

• APR (Annual percentage Rate)
• Interest rate
• Finance charges
• Points
• Service or carrying charges
• Escrow
• Loan fee
• Premiums
• Broker fees
• Appraisal fees

As a consumer, you are empowered by the Truth in Lending Act (TILA) and protected from the lender lying to you, but you are not protected if you don’t take a proactive stance and review all that they have disclosed to you.

If you believe a lender has violated TILA, fill out the form on this page or give us a call at 1-877-735-8600 to get a free case review today.

The consumer law firm of Francis Mailman Soumilas, P.C. is here for you.