What is true regarding installment loans under Regulation Z?

Under Regulation Z, which implements the Truth in Lending Act (TILA), it is important for consumers to have a clear understanding of their financing options. The statement that the total amount, including finance charges, is known at closing is accurate for installment loans. This requirement ensures transparency, allowing borrowers to see the full financial obligation, including the principal and any interest or fees, before they agree to the loan.

This knowledge empowers consumers to make informed decisions about borrowing and helps them compare different lending products effectively. Disclosure of the total amount at closing is fundamental to Regulation Z, which aims to protect consumers by providing them with key information about their loans in a clear and understandable manner.

In contrast, installment loans do typically have a structured payment schedule (which would render the first choice incorrect), they are not limited solely to business purposes (making the third option inaccurate), and while they have a fixed payment amount, they are not characterized by flexible payment amounts (which makes the fourth choice untrue). Thus, the clarity afforded by knowing the total repayment amount at closing is vital in ensuring consumers are aware of their financial commitments.