What is a Disclosure Statement?
How Does a Disclosure Statement Work?
In the case of a loan, the disclosure statement describes the terms of the loan, such as the interest rate, the amount borrowed, the repayment schedule, fees, disbursement conditions, collateral requirements, insurance requirements, prepayment rights (or penalties), and any other expectations of the lender and any additional obligations of the borrower.
The disclosure statement is part of the loan documentation and may be referenced and used as a part of other legal documentation, including the loan agreement, note, security agreements, pledge agreements, and other documents signed when the loan is closed.
The disclosure statement for investments, such as IRAs, explains the rules of the investment in simple, non-technical language. The disclosure statement includes the rights and restrictions of deposits, redemptions, withdrawals and penalties of the investments. In these cases, the disclosure statement is provided in advance of the execution date of the investment, allowing the investor time to consider the requirements and make a decision.
Why Does a Disclosure Statement Matter?
The disclosure statement is an important source of clear, concise, non-technical information about the loan or investment. It is usually written without the legal-speak or complex financial language found in other official documents. It provides the borrower, lender or investor with straightforward information about the obligations, commitments, and rights.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.