What type of loans must provide a 3-day right to cancel under Regulation Z?

The requirement for a 3-day right to cancel, also known as the right of rescission, is specifically designed to protect consumers in certain types of secured transactions involving their primary residence. Under Regulation Z, this right applies to most mortgages and home equity loans, as these types of loans place a lien on the borrower's home.

When a borrower takes out a mortgage or a home equity loan, they are entering into a significant financial commitment that could have long-term implications. The right to cancel allows consumers a period of time to reconsider their decision and rescind the loan agreement if they believe it is not in their best interest.

This provision is not applicable to other types of loans, such as personal loans, automobile loans, or short-term payday loans, because those do not typically involve securing the loan with the borrower's home. Therefore, the correct answer highlights the specific loans that must adhere to this cooling-off period under Regulation Z to ensure informed consumer decisions regarding their most important asset— their home.