A lender advertises "7.25%" APR. Which information must be provided in the same advertisement?

A lender advertises "7.25%" APR. Which information must be provided in the same advertisement?

• A. Payment period of the loan
• B. Finance charge for the loan
• C. No financial information is required
• D. Last date the offer is good for

Answer: (A)

When a lender puts an APR in an advertisement, the rate alone doesn’t show how much you’ll actually pay each period or over the life of the loan. To interpret the APR and compare offers meaningfully, the advertisement must also disclose the loan’s term—the payment period. Knowing the length of the loan lets a borrower translate the APR into a realistic payment schedule. The other options aren’t the required accompanying detail in this scenario: the finance charge or amount financed may be disclosed in other contexts, but the essential piece tied to interpreting an advertised APR is the payment period. The offer’s end date isn’t mandated solely because APR is stated, and stating that no financial information is required isn’t accurate.

When a lender puts an APR in an advertisement, the rate alone doesn’t show how much you’ll actually pay each period or over the life of the loan. To interpret the APR and compare offers meaningfully, the advertisement must also disclose the loan’s term—the payment period. Knowing the length of the loan lets a borrower translate the APR into a realistic payment schedule.

The other options aren’t the required accompanying detail in this scenario: the finance charge or amount financed may be disclosed in other contexts, but the essential piece tied to interpreting an advertised APR is the payment period. The offer’s end date isn’t mandated solely because APR is stated, and stating that no financial information is required isn’t accurate.