Question

A down payment is an upfront payment of
to make a purchase.

Answer 1

A down payment is an upfront payment of money—typically a portion of the total purchase price—paid at the time of purchase to reduce the amount financed and show the buyer’s commitment.

Common examples:
- Home: often 3–20% (or more) of the purchase price
- Car: commonly 10–20%
- Other purchases: varies by seller/loan terms

Purpose: lowers the lender’s risk, reduces monthly payments, and may affect interest rate and loan approval.