The specifics of a loan, such as interest rate, payment structure, and duration, can differ significantly from one to another. Which of these loans is likely to have the lowest interest rate?
payday loan (Choice B) mortgage B mortgage (Choice C) credit card C credit card
The mortgage (Choice B) is likely to have the lowest interest rate compared to a payday loan (Choice A) and a credit card (Choice C).
Of the given options, a mortgage loan (Choice C) is likely to have the lowest interest rate. Mortgage loans typically have lower interest rates compared to payday loans and credit card loans. This is because mortgages are secured loans that use the property being financed as collateral, reducing the risk for lenders. Payday loans and credit card loans are usually unsecured and have higher interest rates as a result. It's important to note that interest rates can vary depending on factors such as the borrower's creditworthiness and prevailing market conditions.
To determine which loan is likely to have the lowest interest rate, let's break down the options:
Choice A: Payday Loan
Payday loans typically have very high-interest rates, often in the range of 300% to 400% APR (Annual Percentage Rate). Therefore, a payday loan is unlikely to have the lowest interest rate.
Choice B: Mortgage
Mortgages are long-term loans used for purchasing or refinancing property. Since mortgages are secured by the property itself, they tend to have lower interest rates compared to other types of loans. However, mortgage rates can vary widely depending on factors such as the borrower's creditworthiness, market conditions, and the length of the loan term.
Choice C: Credit Card
Credit card interest rates can also vary widely, ranging from around 15% to 25% APR or even higher. While credit cards are convenient for short-term borrowing, they typically have higher interest rates than mortgages.
Based on the information provided, it is most likely that mortgage (Choice B) will have the lowest interest rate among the options given. However, it's important to note that interest rates can fluctuate over time and are subject to individual circumstances, so it's advisable to research and compare rates from different lenders before making a decision.