TRUTH IN LENDING AND ADVERTISING -
HOW TO ADVERTISE CREDIT
If an advertisement promoting closed-end credit for real estate contains any of the following trigger terms, the three specific disclosures listed at the bottom of this page must also be included in the advertisement. The triggering terms are:
1. The amount of the down payment, expressed either as a percentage or as a dollar amount.
EXAMPLES: "10% down"
"25% down"
"90% financing"
2. The amount of any payment expressed either as a percentage or as a dollar amount.
EXAMPLES: "Monthly payments less than $67"
"Pay 5% each month"
"$9 per month"
3. The number of payments.
EXAMPLES: "36 small payments are all you make"
"48 monthly payments and you're paid up"
4. The period of repayment (the total time required to repay).
EXAMPLES: "Five years to pay"
"36 months to pay"
"4 year loans available"
5. The amount of any finance charge.
EXAMPLES: "Financing costs less than $100"
"Less than $100 interest"
"$100 financing"
The following are examples which do not trigger the required disclosures:
"No down payment"
"18% Annual Percentage Rate"
"Rate loans available here"
"Easy monthly payments"
"Loans available at 5% below our standard annual percentage rate"
"Low down payment accepted"
"Pay weekly"
"Terms to fit your budget"
"Financing available"
Required Disclosures
If any triggering term is used in a closed-end credit advertisement, then the following three disclosures must also be included in that advertisement:
1. The amount or percentage of the down payment;
2. The terms of repayment; and
3. The "annual percentage rate,"using that term spelled out in full. If the annual percentage rate may be increased after consummation of credit transaction, that fact must be disclosed.
