What is the Truth in Lending Act?

The Truth in Lending Act, which was put into place in 1968, is a law designed to help consumers avoid potential credit pitfalls and stay in control of their financial situations. The Truth in Lending Act helps a lot of consumers stay away from bad situations that were common in lending. It holds lenders to a certain level of accountability and consistency in the industry. Here are a few things that you need to know about the Truth in Lending Act. 

Full Disclosure

One of the great things about the Truth in Lending Act is that it requires full disclosure on any lending procedure. Before this act was put into place, lenders could charge fees without borrowers ever realizing what they were paying for. They could also charge rates that were not fully disclosed and explained to the borrower. This led to a lot of people making unwise borrowing decisions along the way. Thanks to the Truth in Lending Act, you can get the money you need and not have to wonder what you are paying for. 

Standardization

Another good thing about the Truth in Lending Act is that it required all lenders to standardize the way in which costs are disclosed. This makes it easier to understand when working with multiple lenders. 


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