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Explain the intent of the Truth in Lending Act. What is the difference between the finance...

Explain the intent of the Truth in Lending Act. What is the difference between the finance charge and the APR? please help! thank you

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Expert Solution

The intent of truth in lending act is to protect consumers in their transactions with lenders and creditors.The Truth In Lending Act(TILA) is a federal law that was enacted in 1968.The act mainly deals with disclosure of information with regard to the Annual percentage rate and the total borrowing cost (finance charge).

Annual Percentage Rate(APR)

Annual Percentage rate refers to the annual rate of interest that the borrowers are charged or the interest earned by the depositors on their deposits..It is expressed as an interest rate.APR is used in mortgages credit cards car loans etc.

Finance Charge

From a personal finance perspective ,finance charge refers to the fee charged for utilizing credit or extending the credit.Finance charge allows lenders to make a profit on the credit they provide.It is often expressed as a dollar amount.It is often the combination of the cost of the credit along with the transaction fee the account maintenance fee and late fee if applicable.

jeff jeffy answered 1 year ago
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