The Truth in Lending Act
Enhanced Implementation of the Truth in Lending Act (Republic Act 3765)
The State protects its citizens from a lack of awareness of the true cost of credit to the customer by assuring a full disclosure of such cost and other terms and conditions with a view of preventing the uninformed use of credit.
As such, a disclosure statement is a required attachment to the loan contract. It shall include, at a minimum, the following information:
- 1. Total amount to be financed.
- 2. Finance Charges and all other charges incident to the loan.
- 3. Net proceeds of the loan.
- 4. Schedule of Payments.
- 5. The percentage that the finance charge bears to the total amount to be financed expressed as an Effective Interest Rate (EIR).