The option that will save you money over the life of your loan is:
d. making larger payments than required.
Making larger payments reduces the principal balance faster, which can decrease the amount of interest you'll pay over the life of the loan.
Here’s a brief explanation of the other options:
-
a. taking a loan with a longer term: This typically results in lower monthly payments, but you will pay more interest over the life of the loan.
-
b. taking a loan with a higher APR: This means you'll pay more interest, which will cost you more over the life of the loan.
-
c. making a smaller down payment: This usually results in a larger loan amount, which can lead to more interest paid over the term of the loan.
In summary, making larger payments than required is the best option for saving money on your loan over time.
1 answer