“Can I put ‘only $99 a month’ on my site?” Yes, but not by itself. Under Regulation Z, the federal rule that carries out the Truth in Lending Act, a monthly payment amount is a “triggering term.” Once it appears in an ad, the ad must also state the down payment, the terms of repayment and the annual percentage rate. Leave those out and a harmless-looking banner becomes a non-compliant credit ad.
You may think this is the lender’s problem. It is not. The official interpretation of Regulation Z says: “All persons must comply with the advertising provisions in §§ 1026.16 and 1026.24, not just those that meet the definition of creditor.” It goes on to name “home builders, merchants, and others who are not themselves creditors.” A contractor who advertises a lender’s financing is one of those others.
What counts as an ad
Regulation Z treats as advertisements the commercial messages that promote consumer credit. The examples in the interpretation include electronic ads “such as on the Internet,” promotional flyers, direct mail, printed material on any sign, point-of-sale displays and letters sent as part of an organized solicitation. So your website, your mailers, your yard signs and your social posts all count.
What does not count, in the interpretation’s words: “Direct personal contacts, such as follow-up letters, cost estimates for individual consumers, or oral or written communication relating to the negotiation of a specific transaction.” A payment figure on one homeowner’s estimate is not an ad under this rule, though other rules still apply to the loan itself.
The four triggering terms
For an installment loan (closed-end credit: a loan with a set number of payments), 12 CFR 1026.24(d)(1) lists four. The examples in the table are from the CFPB’s official interpretation.
| Triggering term | Triggers | Does not trigger |
|---|---|---|
| The amount or percentage of any down payment | “Only 5% down,” “As low as $100 down” | “No downpayment” |
| The number of payments or period of repayment | “48-month payment terms,” “Repayment in as many as 36 monthly installments” | “Pay weekly,” “monthly payment terms arranged,” “take years to repay” |
| The amount of any payment | “Payable in installments of $103,” “$25 weekly” | “Monthly payments to suit your needs” |
| The amount of any finance charge | “$500 total cost of credit,” “$2 monthly carrying charge” | The APR alone; “no closing costs” |
A term counts even when it is only implied. The interpretation’s example: “80 percent financing available” is in fact saying a 20 percent down payment is required, so it triggers.
What has to follow a trigger
Section 1026.24(d)(2) requires three more terms, as they apply:
The rule lets you meet this with an example of a typical loan stating all its terms. The interpretation adds that examples “must be labeled as such and must reflect representative credit terms made available by the creditor.” It also accepts a unit-cost form such as “48 monthly payments of $27.83 per $1,000 borrowed.”
Three more rules apply to these ads. Section 1026.24(a): state only terms that “actually are or will be arranged or offered by the creditor,” so the numbers come from your lender’s current program, not an online calculator. Section 1026.24(b): the disclosures must be clear and conspicuous; for a loan not secured by the home, the interpretation sets no type size, but a footnote nobody can read is still a problem. And section 1026.24(c): if you state a rate, state it as an annual percentage rate.
On a website, the rule allows the full terms to sit in one table elsewhere on the site, if the table is clearly set out and the ad’s triggering term clearly refers to where the table is (1026.24(e)).
The $99 ad, done right
Say your lender’s current program offers 120 monthly payments at 9.99% APR with no down payment, and a typical financed job is $7,500. The arithmetic gives a payment of $99.07. A line that carries the required terms reads something like:
Finance a $7,500 project for $99.07 a month. Example: $7,500 financed at 9.99% APR for 120 months with no down payment is 120 monthly payments of $99.07. Subject to credit approval.
The example names the down payment (none), the repayment terms over the full loan (120 payments of $99.07) and the APR. If the rate were variable, the line would also say it may increase. If you only want to tell people that financing exists, use words that do not trigger anything, such as “Financing available” or the interpretation’s own “monthly payment terms arranged.”
Credit lines and “no interest if paid in full”
If the financing you offer is a revolving account, like a store card, rather than an installment loan, its ads fall under 12 CFR 1026.16 instead, with different triggers and disclosures. One rule matters most: an ad for credit to buy specified goods or services that states a periodic payment must also state the total of payments and the time to repay, assuming the customer pays only that amount, equally prominent with the payment.
Deferred-interest promotions have their own rule, 1026.16(h). The ad must state the deferred-interest period clearly. If it says “no interest” or similar, the words “if paid in full” must come before that period, and in a printed or online ad both must sit right next to each “no interest,” “no payments” or “same as cash.” Near the first mention of “no interest,” “no payments,” “same as cash” or similar, the ad must say that interest will be charged from the date of the purchase if the balance is not paid in full within the period, and, if it applies, from that date if the account goes into default first. Ask your lender which kind of product you are offering before you write a word.
The price itself: dealer fees
If your lender charges you a fee on each financed job, read this part closely. The CFPB’s 2024 Issue Spotlight on solar financing described how such fees can end up in the loan: hidden fees, often called dealer fees, that raise the loan principal above the cash price, typically 10 to 30 percent of the cash price and sometimes over 50 percent. Its example: a $30,000 cash price with a $9,000 fee becomes a $39,000 loan, the installer receives $30,000, and the lender keeps $9,000. The report found the stated APRs often do not include those fees.
That report is about solar, but the question applies to any contractor who charges financed customers more than cash customers. Regulation Z defines the finance charge as the cost of credit, including charges “imposed directly or indirectly by the creditor as an incident to or a condition of the extension of credit,” and its list of examples includes “discounts for the purpose of inducing payment by a means other than the use of credit” (1026.4(b)(9)). Settle with your lender, and a lawyer if needed, how a fee is handled before you advertise either price.
The Holder Rule, when you arrange the loan
The FTC’s Holder Rule (16 CFR 433.2) makes it an unfair practice for a seller to accept the proceeds of a purchase-money loan unless the loan contract contains a specific notice in at least ten-point bold type. A purchase-money loan, in the rule, is one from a lender you refer customers to or are tied to by common control, contract or business arrangement, which can take in a lender whose financing program you offer your customers. The notice reads in part: “ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER” and “RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.”
In plain words: if the work is defective, the homeowner can raise the same claims and defenses against whoever holds the loan, and can recover from the holder no more than they have paid on it. The rule covers consumers buying for personal, family or household use, and it does not apply to credit card issuers acting as such. A similar notice is required if you finance jobs yourself on installment contracts. Before you take a lender on, check that its contract carries the notice.
Before the ad goes out
Related rules apply to the prices themselves: see Showing Prices on Your Website Without a Quote Tool for the FTC’s limits on “starting at” prices, and Getting Paid Faster for payment schedules that need no lender at all.
General information, not legal or tax advice. Rules change and vary by state; check with the agency named above or a professional for your situation.