What should be included in documentation when financing more than four installments?

When financing more than four installments, it is essential to provide full disclosure of finance charges and terms as part of the documentation. This requirement is in place to ensure transparency and consumer protection, enabling borrowers to understand the overall cost of the financing arrangement.

Including full disclosure means detailing all applicable finance charges, the annual percentage rate (APR), the total costs of the loan, and any other pertinent information that affects the borrower’s financial obligations. This comprehensive information allows the borrower to make informed decisions regarding their financing options.

While a summary of financing terms, just the interest rate, or only an agreement with the customer might provide some information, they do not encompass the complete picture required for responsible financing practices. Comprehensive documentation is crucial in maintaining legal compliance and fostering trust between the lender and borrower.