Closed-end transactions involve a fixed amount to be paid back over a period of time such as a note or a retail installment contract.
Illinois General Disclosures Required By The Federal Truth In Lending Act — Retail InstallmenContractac— - Closed End Disclosures refer to the legal requirements that must be met by lenders and sellers in Illinois when entering into retail installment contracts for closed-end credit transactions under the Federal Truth In Lending Act (TILL). The TILL is a federal law that seeks to promote informed consumer choice by requiring lenders to provide clear and accurate disclosures regarding the terms and costs of credit. In Illinois, certain additional general disclosures are required to be provided to consumers to ensure transparency and protect their rights. The following are some key general disclosures required under the TILL for closed-end credit transactions in Illinois: 1. Finance Charge: Lenders must disclose the total finance charges associated with the loan, expressed as a dollar amount. This includes any interest, fees, and other charges imposed on the consumer. 2. Annual Percentage Rate (APR): The APR must be disclosed, representing the true cost of credit on an annual basis, expressed as a percentage. It reflects not only the interest rate but also any finance charges or fees associated with the loan. 3. Total Amount Financed: This disclosure includes the total amount of credit provided to the consumer, including any finance charges, fees, or other costs imposed by the lender. 4. Total Payments: Lenders must disclose the total amount the consumer will pay over the life of the loan, which includes both principal and interest payments. 5. Payment Schedule: The payment schedule must be disclosed, detailing the number and frequency of payments, as well as the dates on which they will be due. 6. Late Payment Charges: Lenders must disclose any applicable late payment charges, including the amount and conditions under which they may be imposed. 7. Prepayment: If applicable, lenders must disclose whether prepayment penalties or fees will be imposed if the consumer decides to repay the loan early. 8. Security Interest: If the loan is secured by collateral, such as a vehicle or property, lenders must disclose this information and provide details about the security interest. 9. Insurance Requirements: If the lender requires the consumer to obtain insurance coverage for the secured property, such as auto or homeowner's insurance, these requirements must be disclosed. Different types of closed-end disclosures may vary depending on the specific loan terms and conditions. However, these general disclosures are typically required in all retail installment contracts involving closed-end credit transactions in Illinois, ensuring that consumers have the necessary information to make informed decisions about borrowing money. It is essential for lenders and sellers to comply with these disclosure requirements to avoid any potential legal consequences and protect consumer rights.
