The Truth in Lending Act

Republic Act 3765, otherwise known as the Truth in Lending Act (TILA)

Philippine law that requires creditors to disclose the true cost of credit to borrowers. This law is designed to help borrowers make informed decisions about whether or not to take out a loan, and to help them understand the terms of the loan.
 

Here are some of the key points of TILA that banking customers need to know:

• Creditors must disclose the APR (annual percentage rate). The APR is the true cost of credit, expressed as a yearly percentage. It includes the interest rate, as well as other fees and charges associated with the loan.

• Creditors must disclose the finance charge. The finance charge is the total amount of interest and fees that will be paid on the loan.

• Creditors must disclose the terms of the loan. This includes the length of the loan, the payment schedule, and any prepayment penalties.

• Creditors must provide borrowers with a copy of the TILA disclosure. This disclosure should be in a clear and easy-to-understand format.

If a creditor fails to comply with TILA, borrowers may be entitled to damages. Borrowers may also be able to cancel the loan.

Here are some additional tips for banking customers who want to understand their rights under TILA:

• Read the TILA disclosure carefully. This disclosure will tell you everything you need to know about the cost of the loan and the terms of the loan.

• Ask questions if you don't understand something. The creditor is required to answer your questions in a clear and understandable way.

• Keep a copy of the TILA disclosure. This will help you if you have any problems with the loan later on.

TILA is an important law that helps borrowers make informed decisions about credit. By understanding your rights under TILA, you can protect yourself from hidden costs and unfair practices