Why is the Truth-in-Lending Act important for borrowers?

The Truth-in-Lending Act (TILA) is crucial for borrowers because it was designed to promote informed use of consumer credit by requiring disclosures about its terms and costs. This act helps borrowers understand the true cost of borrowing by mandating lenders to provide clear and comprehensive information about interest rates, monthly payments, and any additional fees associated with a mortgage or loan. As a result, borrowers can make better comparisons between different credit offers and understand their financial commitments more clearly. This transparency enables borrowers to make educated decisions, ultimately helping them avoid costly surprises down the line. Therefore, the focus of TILA is on ensuring that consumers are fully aware of the financial implications of their lending agreements.