Under the Truth in Lending Act, what is a "trigger term"?

A "trigger term" is a specific term in the context of the Truth in Lending Act that necessitates additional disclosures when used in advertisements. These terms inform consumers about aspects such as the amount or percentage of any down payment, the number of payments, the period of repayment, or the amount of any payment. The purpose of identifying these terms is to ensure consumers receive clear and comprehensive information about the financial products being advertised so they can make informed decisions.

When an advertisement includes a trigger term, the lender or company must provide further details, such as the total cost of the loan or the Annual Percentage Rate (APR). This regulation is in place to prevent misleading or incomplete information that could misguide consumers regarding loan terms. The other options do not accurately describe what constitutes a trigger term under the Truth in Lending Act, focusing instead on other areas unrelated to the advertising focus of trigger terms.