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Which of these statements is true?(1 point)

Responses

You can save money by making the smallest down payment the lender will allow.
You can save money by making the smallest down payment the lender will allow.

There is no reason to pay off a loan early.
There is no reason to pay off a loan early.

The more you owe, the higher your interest payment will be.
The more you owe, the higher your interest payment will be.

When shopping for a loan, you need to compare only APRs.
When shopping for a loan, you need to compare only APRs.

1 answer

The true statement among the options given is:

The more you owe, the higher your interest payment will be.

This statement is correct because interest payments are calculated as a percentage of the amount borrowed. Therefore, if you owe more, your interest payments will generally be higher.

The other statements are not necessarily true:

  • Making the smallest down payment can lead to higher overall costs due to larger loan amounts and potentially higher interest rates.
  • There can be benefits to paying off a loan early, such as saving on interest payments.
  • While comparing APRs is important when shopping for a loan, it is not the only factor to consider; terms and fees should also be taken into account.