Before you sign an agreement for a loan to buy a house, a car or other large purchase, make sure you fully understand all the lender's terms and conditions, including:
- The dollar amount you are borrowing.
- The payment amounts and when they are due.
- The total finance charge, the total of all the interest and fees you must pay to get the loan.
- The Annual Percentage Rate (APR), the rate of interest you will pay over the full term of the loan.
- Penalties for late payments.
- What the lender will do if you can't pay back the loan.
- Penalties if you pay the loan back early
The Truth in Lending Act requires lenders to give you this information so you can compare different offers.
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