When is a borrower entitled to receive a Truth in Lending Disclosure?

A borrower is entitled to receive a Truth in Lending Disclosure before signing the loan agreement because this requirement is rooted in the objectives of Regulation Z. The purpose of the Truth in Lending Act is to promote informed use of consumer credit by requiring disclosures about its terms and costs. This regulation ensures that borrowers have the necessary information before they commit to a loan, which allows them to make a well-informed decision.

Receiving this disclosure prior to signing the loan agreement gives borrowers the opportunity to review critical information such as the annual percentage rate (APR), finance charges, total payments, and other key terms. This upfront disclosure is essential for understanding the full scope of financial obligations associated with the loan, thus fostering transparency and supporting consumer protection.

The other options suggest scenarios that do not align with the regulatory standards. For instance, receiving the disclosure after closing would not fulfill the purpose of ensuring that borrowers are adequately informed before they make a binding commitment. Similarly, providing the disclosure only upon submission of the loan application or only if requested would not adequately empower borrowers with the necessary information prior to their agreement.