Short answer: before you sign a fixed term personal loan, the lender must give you its Truth in Lending disclosures. Use them to ask about the APR, the finance charge, the amount financed and the total of payments, then about the payment schedule, paying early, late charges, any security and any insurance. If an answer does not match the paper, do not sign until it does. This is general information, not legal or financial advice.
When you get the disclosures
Regulation Z says the creditor “shall make disclosures before consummation of the transaction” (12 CFR 1026.17(b), eCFR, text up to date as of October 28, 2026, read October 30, 2026), “clearly and conspicuously in writing, in a form that the consumer may keep” (1026.17(a)(1)). The terms “finance charge” and “annual percentage rate”, with their amounts, must be more conspicuous than any other disclosure except the creditor’s identity (1026.17(a)(2)). If you sign online, see signing loan documents electronically. For a line by line walk through of the form, see how to read a loan disclosure.
The questions, item by item
Each row below is a disclosure listed in 12 CFR 1026.18 (eCFR, text up to date as of October 28, 2026, read October 30, 2026), with a question to ask about it.
| Disclosure (12 CFR 1026.18) | What the rule says | Question to ask |
|---|---|---|
| Creditor (a) | The identity of the creditor making the disclosures | Who is the creditor on this loan, and who will I send payments to? |
| Amount financed (b) | Described as “the amount of credit provided to you or on your behalf”; prepaid finance charges are subtracted | Why is the amount financed lower than the loan amount I asked for? |
| Itemization (c) | A written itemization, or a notice of your right to one: money paid to you, credited to your account, paid to others for you, and the prepaid finance charge | Can I have the written itemization, and who gets each payment to others? |
| Finance charge (d) | “the dollar amount the credit will cost you” | Which fees are in the finance charge? |
| APR (e) | “the cost of your credit as a yearly rate” | Why is the APR different from the interest rate? |
| Variable rate (f) | When the rate may increase, any limits, the effect, and an example of the payments after an increase | Can the APR go up after I sign, and what would my payment be? |
| Payment schedule (g) | The number, amounts and timing of payments | Do the number and amount of payments match what I was told? |
| Total of payments (h) | “the amount you will have paid when you have made all scheduled payments” | Is this the full amount I pay if every payment is on time? |
| Prepayment (k) | Whether a charge may be imposed for paying early, or for some loans whether you get a rebate of the finance charge | Is there any charge if I pay off early or pay extra? |
| Late payment (l) | Any dollar or percentage charge for a late payment | What is the late charge, and from which day after the due date does it apply? |
| Security interest (m) | Whether the creditor has or will acquire a security interest in property | Does this loan take an interest in my car, account or other property? |
| Insurance and debt cancellation (n) | The items in 1026.4(d) needed to leave these premiums or fees out of the finance charge | Is the insurance optional, and what does it cost? |
| Contract reference (p) | A statement to see the contract on nonpayment, default, acceleration and prepayment rebates and penalties | Where in the contract are the default and acceleration terms? |
| Required deposit (r) | If a deposit is required, a statement that the APR does not reflect it | Do I have to keep a deposit with you as part of this loan? |
An example, only for the math
This example is only for the math. The $5,000.00 loan and the $250.00 origination fee are example figures. The rate is the Federal Reserve’s August 2026 average of 11.90% APR for 24-month personal loans at commercial banks (Federal Reserve G.19, released October 7, 2026, read October 30, 2026); your own rate depends on your credit and the lender.
| Item | No fee | With a $250.00 fee taken out |
|---|---|---|
| Loan amount | $5,000.00 | $5,000.00 |
| Amount financed | $5,000.00 | $4,750.00 |
| Monthly payment, 24 months | $235.13 | $235.13 |
| Total of payments | $5,643.12 | $5,643.12 |
| Finance charge | $643.12 | $893.12 |
| APR | 11.90% | 17.12% |
$235.13 x 24 = $5,643.12. Without a fee, $5,643.12 - $5,000.00 = $643.12. With the fee taken out, the amount financed is $5,000.00 - $250.00 = $4,750.00, and the finance charge is $5,643.12 - $4,750.00 = $893.12, so the APR rises to 17.12% while the interest rate stays at 11.90%. To try your own numbers, use the origination fee calculator; for why the APR and the rate differ, see APR vs interest rate.
Questions about terms the box does not show in full
- Paying early: the disclosure says only whether a charge may apply. Ask how it is figured and read the contract. See personal loan prepayment penalties.
- Late payments: ask about the grace period and what happens to your credit report. See missed personal loan payments.
- Insurance: under 12 CFR 1026.4(d)(1), a premium can be left out of the finance charge only if the insurance is not required, that fact and the premium are disclosed in writing, and you sign or initial a request for it (eCFR). See credit insurance on a personal loan.
- Security: ask what property secures the loan. See secured vs unsecured personal loans.
- Variable rate: ask what the rate is tied to. See fixed vs variable rate personal loans.
Checklist before you sign
- Get the disclosures in writing, in a form you can keep, before you sign.
- Check that the payment times the number of payments equals the total of payments.
- Check that the amount financed matches the money you expect, and ask for the itemization.
- Compare offers for the same amount and term by APR and total of payments.
- Ask about early payoff, late charges, security and insurance, and get the answers in writing.
- If something does not match, ask before you sign. If a lender will not answer, see how to file a loan complaint.
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Sources
- eCFR: 12 CFR 1026.17, General disclosure requirements (Regulation Z), current text up to date as of October 28, 2026
- eCFR: 12 CFR 1026.18, Content of disclosures (Regulation Z), current text up to date as of October 28, 2026
- eCFR: 12 CFR 1026.4, Finance charge (Regulation Z), current text up to date as of October 28, 2026
- Federal Reserve: G.19 Consumer Credit (released October 7, 2026), terms of credit, August 2026: credit card plans and 24-month personal loans
Disclosure: Modern Lending Solutions is not a lender, loan broker or agent for any lender or loan broker, and does not make credit decisions. Any compensation we receive is paid by participating lenders, only for advertising services. This guide is general information, not financial or legal advice.