IADA Broker Practice Exam

When third-party financing is offered, you must disclose all terms and costs so the borrower can truly compare options and avoid hidden charges. This means presenting the full set of terms, the APR (true cost of borrowing including fees), the down payment, the actual monthly payments, and any fees involved. The goal is to prevent any misleading or deceptive terms—if a deal looks attractive on monthly payments but hides high fees or a steep APR, the borrower could be misled. Simply stating the monthly payment or the lender’s name isn’t enough, and saying no disclosure is required is incorrect. Providing complete, clear disclosures lets the borrower see the real cost and make an informed choice.