Why do customers save money if they pay off a closed ended loan faster than the amortization table requires?
A. • Customers can renegotiate the terms of the loan any time.
B. O It does not since the terms of the loan are defined in the table.
C. • Paying more of the principal reduces the amount of interest due.
D. • A closed ended loan has standard payments that include the principal.
C. • Paying more of the principal reduces the amount of interest due.
By paying off a closed ended loan faster than the amortization table requires, customers can reduce the total amount of interest they will end up paying over the life of the loan. This can result in significant savings.