What is the main requirement for variable rate loan disclosures?

The main requirement for variable rate loan disclosures is to provide information about the maximum interest rate that can be charged. This requirement is crucial for consumer protection because it ensures that borrowers are fully informed about the potential costs associated with their loans. Variable rate loans can fluctuate over time; hence, knowing the maximum rate enables borrowers to evaluate their financial risk and make well-informed decisions.

While other disclosures, such as current market rates and payment frequency, contribute to overall transparency, they do not address the maximum exposure a borrower may face. The minimum payment amount, although important, does not capture the full financial implications of a variable interest rate. Thus, the focus on the maximum interest rate aims to protect consumers from unexpected increases in their loan costs.