What must creditors do if they change the terms of a loan after disclosures have been provided?

When creditors change the terms of a loan after providing initial disclosures, they are required to provide revised disclosures before the loan proceeds are disbursed. This requirement is a fundamental aspect of the Truth in Lending Act (TILA). The purpose of requiring revised disclosures is to ensure that borrowers are fully informed about the changes that affect their loan agreement, including any changes in interest rates, payment schedules, or other critical loan terms.

Providing revised disclosures allows borrowers to understand the implications of the new terms on their repayment obligations and overall cost of the loan. It emphasizes transparency in the lending process and helps protect consumers from potential predatory lending practices. By ensuring that borrowers receive updated information, creditors promote an informed decision-making process, allowing borrowers to adequately assess whether they still wish to proceed under the altered loan terms.