Which requirement applies to high-cost loans?

High-cost loans are subject to specific regulations designed to protect borrowers from exploitative lending practices. One of the critical requirements for high-cost loans is the obligation to provide a high-cost loan notice. This notice must be delivered to borrowers, informing them of the terms of the loan and highlighting its nature as a high-cost loan. It serves as a consumer protection measure, ensuring that borrowers are fully aware of the implications of their loan's high costs, including elements like interest rates, fees, and the total cost of borrowing. This transparency is essential in empowering borrowers to make informed decisions about their financial commitments.

The other requirements mentioned do not universally apply to high-cost loans in the same way. For instance, while some high-cost loans may not have prepayment penalties, others could have them, so that option does not universally apply. Mandatory arbitration clauses can vary by lender and loan type, and standard loan repayment terms may differ from one loan to another. Therefore, the high-cost loan notice stands out as a definitive requirement that applies specifically to high-cost loans, ensuring that lenders fulfill their obligation to inform borrowers adequately.