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.
Oregon General Disclosures Required By The Federal Truth In Lending Act — Retail InstallmenContractac— - Closed End Disclosures When entering into a retail installment contract for a closed-end loan in Oregon, it is important for lenders and borrowers to understand the general disclosures required by the Federal Truth in Lending Act (TILL). These disclosures provide transparency, ensuring that borrowers are fully aware of the terms and conditions of their loan agreement. Compliance with these disclosures is essential for both lenders and borrowers to protect their rights and ensure fair lending practices. Under TILL, lenders must provide certain key disclosures to borrowers before consummating the loan agreement. These disclosures include: 1. Finance Charge: The finance charge is the total cost of credit calculated as a dollar amount, representing the total amount of interest and fees that a borrower will pay over the life of the loan. 2. Annual Percentage Rate (APR): The APR is the effective interest rate for the loan, expressed as an annual rate. It factors in both the stated interest rate and any associated finance charges or fees. The APR provides borrowers with a standardized metric to compare loan offers from different lenders. 3. Total Amount Financed: This is the total dollar amount borrowed, including the principal amount and any prepaid finance charges that are financed as part of the loan. 4. Total Sale Price: The total sale price is the total amount the borrower will pay for the purchase, including any prepaid finance charges added to the loan. 5. Payment Schedule: The disclosure must include a detailed payment schedule that outlines each payment amount, payment date, and the number of payments necessary to fully repay the loan. 6. Total of Payments: This disclosure provides the borrower with the total dollar amount paid over the life of the loan, including both principal and interest. 7. Late Payment Fees: If applicable, lenders must disclose any late payment fees or penalties that borrowers may incur for late or missed payments. 8. Prepayment Penalty: If the loan includes a prepayment penalty, lenders must disclose the terms and conditions of the prepayment penalty, including any applicable fees. 9. Security Interest: If the loan is secured by collateral, such as a vehicle or property, the lender must disclose the details of the security interest and any rights or obligations of the borrower related to the collateral. Different types of closed-end loans may require specific additional disclosures unique to their terms or conditions. For example, if a loan includes an adjustable interest rate, lenders must provide additional disclosures related to rate adjustments and potential payment changes. It is essential for both lenders and borrowers in Oregon to understand and comply with the general disclosures required by TILL. Failure to provide these disclosures adequately can lead to legal ramifications and potential penalties. Lenders should ensure that their loan documents include all necessary disclosures and provide borrowers with clear and transparent information about their loan agreements. Borrowers, on the other hand, should carefully review the disclosure documents and seek clarification on any parts they don't understand before signing the agreement. By adhering to TILL's disclosure requirements, lenders and borrowers can establish a fair and transparent lending process in the state of Oregon.
