According to the truth in lending act, a borrower on a refinance transaction to whom the APR has not been properly disclosed has the right to rest in the loan for:

Under the Truth in Lending Act (TILA), if the Annual Percentage Rate (APR) is not disclosed correctly during a refinancing transaction, the borrower has the right to rescind the loan for a period of three years. This provision is designed to protect consumers by ensuring that they are fully informed about the costs associated with their loans, including the APR, which is a key factor in evaluating the true cost of borrowing.

The rationale behind allowing a three-year period for rescission is that it provides borrowers sufficient time to discover any misleading or incomplete information related to their loan terms, giving them a means to exit agreements that were not fully and transparently presented. This long window aligns with TILA’s objective of promoting informed consumer decision-making and maintaining fair lending practices.

Other time frames such as three business days or 30 days do not offer the same level of protection, and a one-year period, while significantly longer than a month, still falls short of the three-year window that TILA mandates for proper disclosures related to refinancing.