Neither loan required a down payment. Loan B has a 2% prepayment penalty. Neither requires credit insurance. If the borrower makes a list of the advantages and disadvantages of each potential loan, what advantages would they show for Loan A? Select the two correct answers. (1 point) Responses Loan B has no prepayment penalty. Loan B has no prepayment penalty. Loan A has a lower interest rate. Loan A has a lower interest rate. Loan A has a lower total cost. Loan A has a lower total cost. Loan A has a higher total cost. Loan A has a higher total cost. Loan A has a lower monthly payment.
The advantages that the borrower would show for Loan A are:
1. Loan A has a lower interest rate.
2. Loan A has a lower total cost.
The two correct advantages that the borrower would show for Loan A are:
1. Loan A has a lower interest rate.
2. Loan A has a lower total cost.
Both of these advantages would make Loan A more favorable compared to Loan B.
To determine the advantages of Loan A, we need to consider the information provided. Based on the given information, the advantages of Loan A are:
1. Loan A has a lower interest rate: Since Loan A is not specifically stated to have a higher interest rate than Loan B, we can assume that it has a lower interest rate, making it more favorable.
2. Loan A has a lower total cost: As Loan A has a lower interest rate, it would lead to a lower total cost over the duration of the loan compared to Loan B.
Therefore, the correct advantages of Loan A are:
- Loan A has a lower interest rate.
- Loan A has a lower total cost.