By: Robert J. Nahoum
The Federal Truth in Lending Act (TILA) is a federal law that was enacted in 1968 to protect consumers from unfair and deceptive lending practices. TILA applies to a wide range of consumer credit transactions, including car loans.
One of the key provisions of TILA is the requirement that lenders disclose certain information to borrowers before they enter into a car loan agreement. This information includes the following:
- The annual percentage rate (APR) of the loan
- The total amount of interest that will be charged over the life of the loan
- The monthly payment amount
- The total amount of the down payment
- The length of the loan term
By requiring lenders to disclose this information, TILA helps consumers to compare different loan offers and make informed decisions about which loan is right for them.
In addition to requiring lenders to disclose certain information, TILA also prohibits certain unfair lending practices, such as:
- Charging excessive interest rates
- Requiring borrowers to pay high fees
- Making false or misleading statements about the terms of a loan
The Federal Truth in Lending Act is an important consumer protection law that helps to ensure that car buyers are treated fairly by lenders. If you are considering taking out a car loan, be sure to understand your rights and protections under TILA.
Here are some additional tips for car buyers to protect themselves under TILA:
- Get pre-approved for a loan before you start shopping for a car. This will give you an idea of how much you can afford to spend and will help you negotiate a better price on the car.
- Shop around for the best interest rate. Don’t just go with the first lender you find. Compare interest rates from different lenders to get the best deal.
- Read the fine print before you sign any loan documents. Make sure you understand all of the terms and conditions of the loan, including the interest rate, monthly payments, and fees.
- Don’t be afraid to ask questions. If you don’t understand something, ask the lender to explain it to you.
- Don’t sign anything you’re not comfortable with. If you have any concerns about a loan, don’t sign the documents. Walk away and find a different lender.
By following these tips, you can help to protect yourself from unfair lending practices and get the best possible deal on your car loan.
If you think a car dealer has not given you the full TILA discourse you are entitled to, or if you think the dealer has hidden or disguised the cost of finance, call an experienced consumer protection attorney familiar with auto fraud to discuss your options. Under TILA, an aggrieved consumer can sue for up to $2,000 in statutory damages, actual damages and attorneys’ fees.