What is the primary purpose of the Truth in Lending Act (TILA)?

The primary purpose of the Truth in Lending Act (TILA) is to promote informed consumer credit choices by requiring disclosures about loan terms. TILA mandates that lenders provide clear and conspicuous information regarding the costs associated with borrowing, such as interest rates, annual percentage rates (APR), and any additional finance charges. This allows consumers to understand the true cost of loans and compare different credit options effectively.

By emphasizing transparency in the lending process, TILA helps safeguard consumers against deceptive lending practices and ensures they have the necessary information to make educated decisions regarding their credit options. This focus on disclosure and clarity is essential for fostering a fair lending environment and encouraging responsible borrowing.