Truth in Lending Act

• What is the official title of Republic Act No. 3765?

  Truth in Lending Act
• What is the main purpose of the Truth in Lending Act?

  • To protect citizens from a lack of awareness of credit costs
  • To ensure full disclosure of credit costs
  • To prevent uninformed use of credit affecting the national economy
• What does the term "Board" refer to in the Truth in Lending Act?

  The Monetary Board of the Central Bank of the Philippines
• How is "credit" defined in the Truth in Lending Act?

  Credit includes loans, mortgages, conditional sales contracts, and other financial arrangements where payment is made after the transaction.
• What does "finance charge" include according to the Act?

  Finance charge includes interest, fees, service charges, discounts, and other charges related to credit extension.
• Who is considered a "creditor" under the Truth in Lending Act?

  A creditor is any person engaged in the business of extending credit who requires a finance charge.
• What does the term "person" encompass in the context of the Act?


  Person includes individuals, corporations, partnerships, associations, and government entities.
• What information must a creditor provide to a person before a credit transaction?

  1. Cash or delivered price of the property or service
  2. Amounts credited as down payment and/or trade-in
  3. Difference between cash price and down payment
  4. Itemized charges not incident to credit
  5. Total amount to be financed
  6. Finance charge in pesos and centavos
  7. Percentage of finance charge as a simple annual rate
• What authority does the Board have under the Truth in Lending Act?

  The Board can prescribe rules and regulations necessary for carrying out the provisions of the Act.
• What are the penalties for a creditor who fails to disclose required information?

  A creditor may be liable for P100 or twice the finance charge, whichever is greater, up to a maximum of P2,000.
• What is the time limit for a person to recover penalties from a creditor under the Act?

  Action to recover penalties must be brought within one year from the date of the violation.
• What is the range of fines for willful violations of the Truth in Lending Act?

  Fines range from P1,000 to P5,000, or imprisonment for 6 months to 1 year, or both.
• Does the Truth in Lending Act apply to the Philippine Government?

  No, the Act does not apply to the Philippine Government or its agencies.
• What is the significance of a final judgment in a criminal proceeding under this Act?

  A final judgment of willful violation serves as prima facie evidence in subsequent actions against the defendant.
• When did the Truth in Lending Act become effective?

  It became effective upon approval on June 22, 1963.
• What is the official title of Republic Act No. 3765?

  Truth in Lending Act
• What is the primary purpose of the Truth in Lending Act?

  To ensure full disclosure of the true cost of credit to protect citizens
• What does the term "Board" refer to in the Truth in Lending Act?

  The Monetary Board of the Central Bank of the Philippines
• How is "credit" defined in the Truth in Lending Act?

  As any loan, mortgage, or contract where part of the price is payable later
• What does "finance charge" include according to the Act?


  Interest, fees, service charges, and other charges related to credit extension
• Who is considered a "creditor" under the Truth in Lending Act?

  Any person engaged in the business of extending credit
• What does the term "person" encompass in the context of the Act?

  Individuals, corporations, partnerships, and government agencies
• What information must a creditor provide to a person before a credit transaction is consummated?

  • Cash price or delivered price of the property or service
  • Amounts credited as down payment and/or trade-in
  • Difference between cash price and down payment
  • Itemized charges not incident to credit
  • Total amount to be financed
  • Finance charge in pesos and centavos
  • Percentage of finance charge to total amount financed
• What authority does the Board have under the Truth in Lending Act?

  The Board can prescribe rules and regulations necessary for the Act's provisions
• What is the penalty for a creditor who fails to disclose required information?

  Liable for P100 or twice the finance charge, whichever is greater, up to P2,000
• What is the time limit for a person to recover penalties from a creditor under the Act?

  One year from the date of the violation
• What are the potential penalties for willful violations of the Act?

  Fines between P1,000 and P5,000 or imprisonment for 6 months to 1 year, or both
• Does the Truth in Lending Act apply to the Philippine Government?

  No, the Act does not apply to the Philippine Government or its agencies
• What is the significance of a final judgment in a criminal proceeding under this Act?

  It serves as prima facie evidence against the defendant in other actions under the Act
• When did the Truth in Lending Act become effective?

  Upon approval on June 22, 1963
• What are the key sections of the Truth in Lending Act?

  1. Section 1: Title of the Act
  2. Section 2: Declaration of Policy
  3. Section 3: Definitions of terms
  4. Section 4: Disclosure requirements for creditors
  5. Section 5: Authority of the Board
  6. Section 6: Penalties for non-compliance
  7. Section 7: Effectivity of the Act