The 6 Laws You Need to Know About to Protect Your Finances 

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Have you ever had a financial transaction handled in a way that made you think, That has to be illegal?

As many great companies as there are out there, there’s always a bad apple that can make you feel as though your rights have been violated. You might wonder how the company gets away with such practices, but without a law degree or financial expertise, you just can’t be sure.

Here’s how you can be sure next time. Read about the key laws below to learn concrete ways to understand if a company you’re dealing with is stepping over the line and breaking the law.

6 laws you need to know about that affect your finances

You can find the full text of the laws mentioned below online, but these brief summaries will walk you through what you need to know to protect yourself in the financial jungle.

1. Truth in Lending Act, a.k.a. ‘Regulation Z’

You might come across this act referred to by a few different nicknames, including the Truth in Lending Act (TILA) and Regulation Z. Its purpose is to help you see what you’re in for when taking on new credit.

The Consumer Financial Protection Bureau (CFPB) says Regulation Z enables you to easily compare credit offers by making all lenders use the same terminology and the same format when stating interest rates. Before the law, the agency says, “consumers were faced with a bewildering array of credit terms and rates.”

The act also serves to protect consumers from “inaccurate and unfair credit billing and credit card practices,” among many other things. Here’s what the founding partner of Wealth Management Group, Craig Bolanos, has to say about it:

“The Truth in Lending Act is mission critical for consumers of loans, as it provides a platform for fair comparison across multiple offers. Essentially, TILA provides a consumer with the real information they need, such as the total cost of borrowing. Hence, it cuts through the red tape of marketing ploys etc., because we all know the devil can be in the details.”

But this act isn’t just about seeing the information you need to know. It’s also about helping you understand what that information means to your pocketbook.

As attorney and Bentley University professor Steven J.J. Weisman explains: “The most important aspect of this law is the required written disclosure of all the finance charges when someone borrows money. … The finance charges must be conspicuously and clearly indicated, along with the total that the borrower must pay if he or she takes the entire term of the loan to pay it back.”

There is a downside though, particularly when it comes to buying a home, according to attorney Eric N. Klein, since the law can result in epically long financial disclosures.

“The average home buyer is flooded with information as a result of the Truth in Lending Act. A borrower receives so much information that the notices and disclosures go unread.”

(The CFPB has the full text of the law here.)

2. Credit Card Accountability Responsibility and Disclosure Act

When it comes to financial disclosures, TILA was just the beginning. The Credit Card Accountability Responsibility and Disclosure Act (also known as the CARD Act) came about in 2009 to amend this law.

The text of the law explains its goal as setting “fair and transparent practices” for credit cards and similar products.

So, what does this mean to you? Like TILA, this law is complex and detailed, and includes far more than can be explained in a simple paragraph. Here’s a breakdown from Weisman of what the new rules do:

  • Gives you the right to be notified of interest rate increases.
  • Prohibits retroactive interest rate increases.
  • Prohibits fees for mail, telephone, or electronic payments.
  • Limits late payment fees and other penalty fees.
  • Provides consumer protection regarding inactivity fees for gift cards.

If you’re interested in reading more about the changes which these regulations brought about, you can read the full text of the CARD Act via the Federal Trade Commission (FTC).

3. Fair Credit Reporting Act

Financial disclosures are one thing, but what about the information being disclosed about you, the consumer? Thanks to the Fair Credit Reporting Act (FCRA), you can see exactly what’s being said in your credit report.

The FCRA is the reason you can review your credit report each year for free at AnnualCreditReport.com. Actually, you can read three credit reports, since each of the three credit reporting bureaus generates its own version. It’s important to view all three because there could be differences between the reports depending on who your lenders send information to.

But this law does a lot more than give you free access to your credit report. Attorney Randall R. Saxton explains:

“The Fair Credit Reporting Act is designed to help consumers by giving rights such as the ability to dispute, correct, or delete inaccurate information in a credit file. Credit agencies must promptly investigate and correct or delete inaccurate information or information that cannot be verified.”

This is important if, say, a transposed social security number ends up putting someone else’s bad borrowing behavior on your report, or a lender incorrectly reports your own borrowing information.

And if you’re not in the market for new credit, these reports can still impact you in big ways. As Weisman explains:

“Because credit reports are so important not just in applying for credit, but in getting a job, renting an apartment, applying for insurance, and many other areas of our lives where our credit reports are used, this law is critically important today.”

And if you spot anything that shouldn’t be there, dispute those errors with the bureau reporting them as soon as possible.

You can read the entire Fair Credit Reporting Act via the FTC website.

4. Fair Debt Collection Practices Act

This next law regulates the way debt collectors must treat consumers. The Fair Debt Collection Practices Act (FDCPA) serves as a protection for consumers against predatory collectors who might try to step over the line to convince you to pay them.

In the words of Bolanos, “no longer can a collector threaten, intimidate, deceive, or engage in other unethical actions when trying to collect a debt.”

Klein says the FDCPA “has strong teeth” when it comes to suing a predatory debt collector, since it keeps attorney costs at a “reasonable” level and sets statutory damages at $1,000 for each violation the collector makes.

In other words, you might be able to sue and get your money back for the costs you pay upfront to do it. However, remember that a lawsuit is still a risk.

You can also use the FDCPA to help you if you’re being called about a debt you’re not sure you owe. Saxton explains that, “debt collectors must send a validation notice in writing within five days of contacting you that clarifies how much and to whom you owe the debt.”

From there, Saxton says, you have 30 days of receiving the notice to dispute or verify the debt, during which time the collector can’t contact you until they’ve sent you written verification of what you owe, such as the bill.

It’s important to remember that stopping abuse doesn’t mean you don’t owe the debt. According to Weisman, “this law protects people from unfair, abusive, and deceptive tactics being used by debt collectors… although that does not stop collection efforts.”

That said, if you’re being contacted about a debt that’s several years old, the next law might be of use to you. You can find the full text of the FDCPA law at the CFPB.

5. Statute of Limitations on Debt

It’s a little-known fact that a clock starts on your debt if it goes into default. From that time on, there is a certain number of years before the debt becomes “time-barred.”

This is the statute of limitations on debt, and although you technically still owe the debt (the only way to get rid of debt besides paying it is through bankruptcy), you might be able to use this law in your defense if a collector tries to sue you.

The statute of limitations on debt varies by state and by debt type, often being broken into the categories of “open” and “closed” debt. Open would include things such as your credit cards or revolving lines of credit, while closed would mean things like an installment loan.

It’s not always that clear-cut, though. For example, there is a statute of limitations on debt for private student loans, but federal loans are exempt from this law.

To find out more details on this law where you live, use this state-by-state guide to the statute of limitations on debt. And if you need additional help, the CFPB has sample letters to write to debt collectors to find out more information on the debt they’re trying to collect (such as its age), as well as advice to help you find an attorney if it comes to that.

6. Telemarketing Sales Rule

Bring the word “telemarketer” up in conversation, and it’s sure to be met with derision. Telemarketers are infamous for cold-calling you to sell you products you never expressed interest in and usually at an inopportune time.

But the Telemarketing Sales Rule (TSR) aims to change that. This law led to the creation of the National Do Not Call Registry. (If you haven’t registered, you can do so online at donotcall.gov or over the phone via 1-888-382-1222).

Besides the fact that this rule can decrease unwanted phone calls, it also regulates the way telemarketers can ask you for money. For example, it’s illegal to ask for your bank account information to create what’s called a “remotely created payment order.” If you get this kind of request over the phone, it could be a scam.

It also makes it illegal for telemarketers to engage in abusive acts, such as charging upfront for debt relief services, or speaking to you in a threatening way.

Likewise, telemarketers can only call you at certain times of day, and they can’t misrepresent their products.

Other aspects of TSR can be found on the FTC website here.

How to use these laws to protect your rights

Now that you know about all of these laws, what can you do if they’ve been violated?

For one thing, you can file a complaint with the CFPB or the FTC.

The CFPB and FTC both use such complaints to understand which companies need further investigation for consumer rights violations. When empowered consumers like yourself complain, it’s that much easier for government agencies like these to take action against companies that break the rules.

And if you think the effort might be pointless, think again. In March, the CFPB fined credit scoring bureau Experian $3 million for selling misleading credit scores.

Besides fighting against unfair practices, the CFPB also releases reports to keep you in the know. An example of this is a recent report on student loan borrowers who are missing out on affordable repayment plans. Whether you’re filing a complaint or just staying up to date on your rights, the CFPB and FTC can help.

Interested in refinancing student loans?

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1 Important Disclosures for Earnest.

Earnest Disclosures

To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.

Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.

Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.

The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at hello@earnest.com, or call 888-601-2801 for more information on ourstudent loan refinance product.

© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.


2 Important Disclosures for Laurel Road.

Laurel Road Disclosures

  1. VARIABLE APR – APR is subject to increase after consummation. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes.

3 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance: Fixed rates from 3.899% APR to 8.179% APR (with AutoPay). Variable rates from 2.570% APR to 6.980% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. SoFi rate ranges are current as of September 14, 2018 and are subject to change without notice. See APR examples and terms. Lowest variable rate of 2.570% APR assumes the current index rate derived from the 1-month LIBOR of 2.08% plus 0.740% margin minus 0.25% AutoPay discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score.
  2. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

4 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.


5 Important Disclosures for CommonBond.

CommonBond Disclosures

  1. Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). The following table displays the estimated monthly payment, total interest, and Annual Percentage Rates (APR) for a $10,000 loan. The Annual Percentage Rate (APR) shown for each in-school loan product reflects the accruing interest, the effect of one-time capitalization of interest at the end of a deferment period, a 2% origination fee, and the applicable Repayment Plan. All loans are eligible for a 0.25% reduction in interest rate by agreeing to automatic payment withdrawals once in repayment, which is reflected in the interest rates and APRs displayed. Variable rates may increase after consummation. All variable rates are based on a 1-month LIBOR assumption of 2.08% effective July 25, 2018.

6 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Education Refinance Loan Rate DisclosureVariable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of August 1, 2018, the one-month LIBOR rate is 2.07%. Variable interest rates range from 2.57%-8.17% (2.57%-8.17% APR) and will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a cosigner. Fixed interest rates range from 3.75%-8.69% (3.75%-8.69% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
  2. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision at http://www.citizensbank.com/EdRefinance, including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
  3. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled, must be in repayment of their existing student loan(s) and must make the minimum number of payments after leaving school. Primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a co-signer who is a U.S. citizen or permanent resident. The co-signer (if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United States. For applicants who have not attained the age of majority in their state of residence, a co-signer will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, certification of borrower’s student loan amount(s) and highest degree earned.
  4. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  5. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
  6. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply.
  7. Estimated average savings amount is based on 14,659 Education Refinance Loan customers who saved on loans between August 1, 2017 and July 31, 2018. The calculation is derived by averaging monthly savings across Education Refinance Loan customers whose payment amounts decreased after refinancing, calculated by taking the monthly payment prior to refinancing minus the monthly payment after refinancing. We excluded monthly savings from customers that exceeded $4,375 and were lower than $20 to minimize risk of data error skewing the savings amounts. Savings will vary based on interest rates, balances and remaining repayment term of loans to be refinanced. Borrower’s overall repayment amount may be higher than the loans they are refinancing even if monthly payments are lower.

2.57% – 6.98%3Undergrad
& Graduate
Visit SoFi
2.47% – 5.87%1Undergrad
& Graduate
Visit Earnest
2.47% – 8.03%4Undergrad
& Graduate
Visit Lendkey
2.80% – 6.22%2Undergrad
& Graduate
Visit Laurel Road
2.48% – 6.25%5Undergrad
& Graduate
Visit CommonBond
2.57% – 8.17%6Undergrad
& Graduate
Visit Citizens
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.