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.
The Federal Truth in Lending Act (TILL) is a federal law that aims to promote fair and accurate lending practices by requiring lenders to disclose certain information to consumers. In the state of New Hampshire, as in all other states, lenders must provide specific disclosures to borrowers in a Retail Installment Contract — Closed End transaction. These disclosures are crucial in informing borrowers of the terms, conditions, and costs associated with their loan. The New Hampshire General Disclosures required by the Federal TILL — Retail InstallmenContractac— - Closed End Disclosures include several key elements. These elements must be provided to the borrower in writing, ensuring transparency and avoiding any potential misunderstandings: 1. Annual Percentage Rate (APR): The APR represents the cost of credit expressed as a yearly interest rate. It includes the interest rate, finance charges, and any other fees associated with the loan. By disclosing the APR, borrowers can easily compare loan offers and understand the overall cost of borrowing. 2. Finance Charge: The finance charge encompasses all costs related to obtaining credit, such as interest, loan origination fees, and any other charges imposed by the lender. This figure enables borrowers to see the total amount of interest and fees they will pay over the loan's duration. 3. Amount Financed: This term refers to the principal loan amount minus any prepaid finance charges. It represents the actual amount the borrower will receive from the loan. 4. Total of Payments: The total of payments illustrates the overall amount the borrower will repay over the loan term, including both principal and interest. This figure helps the borrower calculate the total cost of the loan. 5. Prepayment Penalties: If applicable, lenders must disclose any penalties or fees that borrowers may incur for paying off the loan before the scheduled maturity date. This information is important for borrowers considering early loan repayment. 6. Late Payment Penalties: If the loan agreement includes any charges for late payments, the lender must disclose the penalties. This allows borrowers to understand the consequences of missing payments or making them after the due date. The New Hampshire General Disclosures required by the Federal TILL may also include additional information depending on the specifics of the loan transaction. These variations stem from factors such as loan amount, interest rate, collateral, or special loan terms. However, the essential disclosures mentioned above are the core requirements applicable to all closed-end installment contracts in New Hampshire. By providing this comprehensive information, lenders fulfill their obligations under the Federal Truth in Lending Act, promoting transparency and ensuring borrowers have the necessary knowledge to make informed decisions. These disclosures empower consumers to compare loan offers, understand their financial obligations, and protect them from predatory lending practices.
