Which item is required by law to be disclosed in a Loan Disclosure Statement?

The requirement to disclose the APR (Annual Percentage Rate) in a Loan Disclosure Statement stems from federal regulations designed to promote transparency in lending practices. The APR represents the total cost of borrowing on an annual basis, including interest and any associated fees, expressed as a percentage of the principal amount. This allows borrowers to understand the true cost of the loan over its duration and enables them to compare offers from different lenders effectively.

Disclosing the APR is critical as it provides a standardized metric that can help borrowers make informed decisions regarding their loans. This requirement is enforced by laws like the Truth in Lending Act (TILA), which aims to protect consumers by ensuring they receive clear and understandable information about borrowing costs.

While the other items listed—monthly payment amount, loan repayment options, and approval time frame—are important details, they are not mandated by law to be included in the Loan Disclosure Statement in the same way that the APR is. Therefore, the inclusion of the APR is a key legal requirement that directly impacts a borrower's understanding of loan costs.