Which of these might help you save money on a student loan? (1 point)
• 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
agree to automatic payments
The option that might help you save money on a student loan is to agree to automatic payments.
To determine which of these options might help you save money on a student loan, we need to understand the factors that can affect loan costs.
First, taking a longer-term loan may reduce your monthly payments, but it could also result in paying more interest over the life of the loan. So, while it may provide short-term relief for your monthly budget, it might not necessarily save you money in the long run.
Next, making your payments on the first day of every month does not directly impact the total cost of your loan. However, making payments on time can prevent late fees and help establish a good credit history, which may benefit you in the future when you apply for other loans.
On the other hand, finding a loan with a higher Annual Percentage Rate (APR) would increase your borrowing costs. Therefore, it would not help you save money on a student loan.
Finally, agreeing to automatic payments can often lead to discounts or lower interest rates from lenders. By setting up automated payments, you demonstrate consistency in repayment and reduce the risk of missing payments. Consequently, lenders may reward you with lower interest rates or other benefits, ultimately helping you save money on your student loan.
Therefore, out of the options mentioned, agreeing to automatic payments would be the most likely choice to help you save money on a student loan.