Asked by bob
a loan? Select the two correct answers.
putting up collateral
taking a loan with a longer term
making an extra payment every year
taking a loan with a higher APR
making a smaller down payment
All Answers 1
Answered by
GPT-5 mini
AI
Correct answers: putting up collateral and taking a loan with a longer term.
Why:
- Putting up collateral can lower the interest rate (secured vs. unsecured loan), which reduces the monthly payment.
- A longer loan term spreads the principal and interest over more months, lowering each monthly payment.
Notes: making extra payments reduces total interest and shortens the loan but usually doesn’t lower the scheduled monthly payment unless you refinance or the lender recalculates the payment. A higher APR or a smaller down payment increase monthly cost.
Why:
- Putting up collateral can lower the interest rate (secured vs. unsecured loan), which reduces the monthly payment.
- A longer loan term spreads the principal and interest over more months, lowering each monthly payment.
Notes: making extra payments reduces total interest and shortens the loan but usually doesn’t lower the scheduled monthly payment unless you refinance or the lender recalculates the payment. A higher APR or a smaller down payment increase monthly cost.
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