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QuizMultiple Choice

Study Guide and Quiz

Question 1 • S25 Introduction to Business A (Theisen)

Which of the following things can help you get a lower interest rate when you receive a loan?

Answer
A
A low credit score
B
A history of defaulting
C
Using all of your available credit
D
Collateral

Explanation

Collateral is an asset pledged to the lender that can help repay the loan if you do not. Because it reduces the lender’s risk, offering collateral can help you qualify for a lower interest rate. A low credit score, a history of defaulting, and using all your available credit generally make you seem riskier to lenders.

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