Truth and Transparency in Lending
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:
- Total amount to be financed
- Finance Charges and all other charges incident to the loan
- Net proceeds of the loan
- Schedule of Payments
- The percentage that the finance charge bears to the total amount to be financed expressed as an Effective Interest Rate (EIR)
Important Notice: The borrower has a right to demand a copy of the disclosure statement.