When is the Annual Percentage Rate (APR) disclosed by a lender?
Understanding APR Disclosure
Annual Percentage Rate (APR) is a crucial aspect of any loan agreement as it reflects the true cost of borrowing. Lenders are required by law to disclose the APR to borrowers to ensure transparency and help them make informed financial decisions.
When Does a Lender Have to Disclose APR?
When it comes to disclosing the Annual Percentage Rate (APR), lenders must follow specific guidelines:
A. Lenders do not use APR when making loan agreements.
Incorrect. APR is an essential piece of information that lenders must disclose to borrowers.
B. Lenders must disclose the APR after the loan agreement is signed.
Incorrect. APR disclosure should happen before the loan agreement is signed to inform borrowers of the true cost of their loan.
C. Lenders must disclose the APR before the loan agreement is signed.
Correct! Lenders are required to disclose the Annual Percentage Rate (APR) before the loan agreement is signed to provide borrowers with transparent information about the total cost of borrowing.
D. Lenders are not required to disclose the APR.
Incorrect. Lenders are mandated to disclose the APR to borrowers to promote financial transparency.
When does a lender have to disclose the annual percentage rate (APR)? It's C!!!!!! Lenders disclose the APR before the loan agreement is signed.