How many days of waiting period are required for a change that increases the APR by more than 1/8th after the initial disclosure?

The requirement of a three-day waiting period after an increase in the Annual Percentage Rate (APR) by more than 1/8th is rooted in the need to ensure consumers have adequate time to review significant changes to their loan terms. This waiting period is intended to protect borrowers by giving them the opportunity to reconsider their options in light of the new financial information.

When the APR increases beyond this threshold, it is considered a material change impacting the overall cost of the loan, and thus, a waiting period allows the borrower to fully assess the implications of the new terms before proceeding. This regulation is part of the Truth in Lending Act, which mandates that lenders provide clear and timely disclosures to ensure transparency in lending practices.

Other time frames, such as one day, five days, or seven days, do not align with the specific regulatory requirement for changes to APR that exceed 1/8th. Therefore, three days is the correct and compliant duration for this situation.