Which of these might help you save money on a student loan?(1 point) Responses
agree to automatic payments
take a longer-term loan
make your payments on the first day of every month
find a loan with a higher APR
agree to automatic payments
Of the options given, agreeing to automatic payments can help you save money on a student loan.
To determine which option might help you save money on a student loan, we can analyze each choice and consider its impact on the total cost of the loan.
1. Agree to automatic payments: This option can potentially save you money. Many loan providers offer incentives such as interest rate reductions when you opt for automatic payments. By choosing this option, you are demonstrating reliability in making payments on time and reduce the risk of late fees.
2. Take a longer-term loan: Taking a longer-term loan might lower your monthly payments. However, this option can actually increase the overall cost of the loan due to the accrual of additional interest over the extended repayment period. While it can ease your current financial burden, it may not be the most cost-effective approach.
3. Make your payments on the first day of every month: Making payments on time is crucial to avoid late fees or negative impacts on your credit score. However, the specific date of payment does not typically affect the total cost of the loan.
4. Find a loan with a higher APR: Choosing a loan with a higher Annual Percentage Rate (APR) is unlikely to save you money. A higher APR means higher interest charges on the loan, resulting in increased costs over the repayment term. It is generally more favorable to find a loan with a lower APR to minimize the overall expense.
In conclusion, agreeing to automatic payments and finding a loan with a lower APR are the two options that can potentially help you save money on a student loan.