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Which of the following is most likely to represent a fixed rate, secured debt?
1) A student loan
2) A credit card
3) A loan from a friend
4) A dealer-financed auto loan

Sagot :

Samawati

Answer:

4) A dealer-financed auto loan

Explanation:

A fixed-rate means the interest rates are constant as opposed to variable interest rates. Fixed-rate means the monthly repayments will be a constant and predictable figure every month.

Secured debt refers to a loan that is backed by collateral. The borrower has offered as an asset to the lender as a guarantee that they will pay the debt.

A dealer financed auto loan is most likely to be with a fixed rate and secured. The car being bought on loan acts as the collateral for the loan. Dealers usually insist on fixed interest rates.

Student loans, credit card loans are unsecured loans. A loan from a friend is unlikely to be secured and with a fixed interest rate.

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