Jackson investigated loans for a $15,575 car. What might happen if he found a car he liked for $10,000? (1 point)
• The lenders will not lend him a smaller amount of money.
• The lenders might give him a better interest rate on a smaller loan.
• He would still have to take the bank's loan offer.
• He would have larger monthly payments.
The lenders might give him a better interest rate on a smaller loan.
The answer is: The lenders might give him a better interest rate on a smaller loan.
If Jackson found a car he liked for $10,000 instead of the $15,575 he investigated loans for, the lenders might give him a better interest rate on a smaller loan. This is because borrowing a smaller amount of money typically lowers the lender's risk, and they may offer a lower interest rate as a result.
To determine what might happen if Jackson found a car he liked for $10,000, we need to consider the factors that would potentially affect his loan. Here are a few possibilities:
1. The lenders will not lend him a smaller amount of money: This could be the case if the lenders have a minimum loan amount requirement. Some lenders have a set minimum loan amount, and if the car price is below that threshold, they might not offer a loan.
2. The lenders might give him a better interest rate on a smaller loan: If Jackson decides to borrow a smaller amount for the $10,000 car, some lenders might offer a better interest rate. This is because the risk associated with a smaller loan amount is relatively lower, and they might be willing to provide more favorable terms.
3. He would still have to take the bank's loan offer: Regardless of the car price, if Jackson decides to take on a loan, he would need to accept the loan offer made by the bank or lender. It is up to him whether he wants to proceed with the loan or explore other financing options.
4. He would have larger monthly payments: If Jackson chooses to take a smaller loan for the $10,000 car, his monthly loan payments might be higher. This is because the loan amount would be lower, but the lender may still require the loan to be repaid over a similar period, resulting in a higher monthly payment.
Ultimately, the exact outcome would depend on the policies of the lender and the terms agreed upon by Jackson. It is important for him to research and compare loan options from multiple lenders to find the most suitable terms for his desired car price and budget.