Illinois Real Estate Practice Exam

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Prepare for the Illinois Real Estate Test. Practice with flashcards and multiple choice questions, each question has hints and explanations. Get ready for your exam!

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Which loan type is eligible for a cooling off period under the Truth In Lending Act (TILA) allowing for rescission?

Commercial Loan
Consumer Credit Loan
Construction Loan
Adjustable-Rate Mortgage Loan

The correct answer is: Consumer Credit Loan

The correct answer is consumer credit loan, as this type of loan is the only one that qualifies for a cooling-off period under the Truth In Lending Act (TILA). This period allows borrowers a specific duration during which they can rescind the loan agreement without penalty. This consumer protection feature is designed to give borrowers an opportunity to reconsider their decision after the loan has been finalized, ensuring they fully understand the terms and implications involved. In contrast, other options such as commercial loans, construction loans, and adjustable-rate mortgage loans typically do not have this rescission right because the focus of TILA is primarily on consumer protection for personal, family, or household purposes. These other loan types are often associated with business or investment purposes, which are not covered under TILA in the same way.