Question

Which of the following statements are true of an installment loan?

1) the term is much longer than other loans

2) lower interest rates are charged to borrowers

3) is technically an unsecured loan

4) has a fixed number of payments in equal amounts

Answer 1

Answer:

4) has a fixed number of payments in equal amounts

Explanation:

1) the term is much longer than other loans

FALSE, installment loans can be short or long, the term refers to periodic payments.

2) lower interest rates are charged to borrowers

FALSE, interest rates vary depending on the customer and the purpose of the loan, they can be higher or lower.

3) is technically an unsecured loan

FALSE, they can be secured or unsecured loans, there is no one size fits all rule