What does the Truth in Lending Act ensure?

The Truth in Lending Act (TILA) is designed to promote informed use of consumer credit by requiring clear and consistent disclosure of key terms and costs associated with loans. This law mandates that lenders provide borrowers with a detailed breakdown of the loan conditions, including the annual percentage rate (APR), finance charges, payment schedule, and other important terms. By ensuring that consumers receive clear information about the costs and conditions of their loans, the act helps them make informed financial decisions and compare different credit offers effectively. This transparency is crucial for safeguarding consumer rights and promoting fair lending practices.