Question

What can affect the interest rate for a loan? Choose three correct answers.

O the time of the year the loan is taken out
O the customer's ability to repay the loan
O the customer's social media posts
O what the loan is used for economic conditions

Answer 1

Three factors that can affect the interest rate for a loan are the borrower's ability to repay the loan, economic conditions, and the purpose of the loan.

Step-by-step explanation:

Three factors that can affect the interest rate for a loan are:

1. The borrower's ability to repay the loan. If a borrower has a history of late loan payments, it indicates a higher risk of default and lenders may charge a higher interest rate to compensate for this risk.
2. Economic conditions. When interest rates in the economy rise, loans made at lower interest rates become less attractive, and lenders may charge higher rates for new loans.
3. The purpose of the loan. Different types of loans may have different interest rates. For example, a loan for a high-profit firm may have a lower interest rate compared to a loan for a riskier venture.