What must be disclosed if an advertisement for a closed-end loan mentions a down payment?

What must be disclosed if an advertisement for a closed-end loan mentions a down payment?

• A. Only the minimum credit score required.
• B. The maximum interest rate associated with the loan.
• C. The terms of a normal transaction being advertised.
• D. The borrower's total income level.

Answer: (C)

When an advertisement for a closed-end loan mentions a down payment, it is required to disclose the terms of a normal transaction being advertised. This means that the advertisement must include key information that allows potential borrowers to understand the specific terms and conditions associated with the loan being offered, not just a single component like the down payment. This requirement stems from the purpose of the Truth in Lending Act, which is to promote informed use of consumer credit by requiring disclosures about its terms and costs. By providing comprehensive terms of a normal transaction, including details like the loan amount, interest rate, payment schedule, and the total cost over the life of the loan, consumers can better compare credit offers and make informed decisions. Focusing only on other aspects like the minimum credit score, maximum interest rate, or the borrower's total income would not provide a full picture of the loan terms, nor would it satisfy the disclosure requirements set forth in the regulation. Thus, the correct answer emphasizes the necessity of complete and informative advertising practices within the scope of the Truth in Lending regulations.

When an advertisement for a closed-end loan mentions a down payment, it is required to disclose the terms of a normal transaction being advertised. This means that the advertisement must include key information that allows potential borrowers to understand the specific terms and conditions associated with the loan being offered, not just a single component like the down payment.

This requirement stems from the purpose of the Truth in Lending Act, which is to promote informed use of consumer credit by requiring disclosures about its terms and costs. By providing comprehensive terms of a normal transaction, including details like the loan amount, interest rate, payment schedule, and the total cost over the life of the loan, consumers can better compare credit offers and make informed decisions.

Focusing only on other aspects like the minimum credit score, maximum interest rate, or the borrower's total income would not provide a full picture of the loan terms, nor would it satisfy the disclosure requirements set forth in the regulation. Thus, the correct answer emphasizes the necessity of complete and informative advertising practices within the scope of the Truth in Lending regulations.