Finance companies are more selective in choosing the lender they serve, and therefore usually charge lower interest rates than banks or credit unions.

Question

Question 34 options:

True

False

Answer 1

False.

Finance companies often charge higher interest rates than banks or credit unions because they tend to serve higher-risk borrowers and do not have the same level of access to low-cost funding that banks and credit unions might have. Banks and credit unions may offer more competitive rates due to their broader base of funding options and lower risk profiles.